Divestment

Big Four consulting stains muddy breakup case

2 Oct 2023

EY and PwC are under scrutiny amid a tax scandal and accusations of shoddy work. The case for splitting these companies depended on their advisory arms delivering racy growth. But with dinged reputations and valuations of rivals falling, breaking up will be even harder.

Amazon has a poor man’s monopoly

27 Sep 2023

Trustbusters sued the $1.3 trln retailer over how it restricts merchants on its site. But it has lost ground to rivals like Walmart thanks to bad M&A and retail losses. Amazon gets the worst of two worlds: strong enough to worry regulators, vulnerable enough to concern investors.

Grisly Hulu battle would deepen streaming wars

26 Sep 2023

Comcast and Disney are set to spar over valuing the TV service behind the “The Bear.” Cable boss Brian Roberts figures his company’s 33% stake is worth a bundle; rival Bob Iger will disagree. A long fight makes little sense when they’ll probably wind up around $33 bln anyway.

Grab can feast on Delivery Hero’s Asia leftovers

21 Sep 2023

The Singapore giant is an obvious buyer for its rival’s Southeast Asian food business, a potential $1 bln purchase. It has extended its lead before by gobbling up operations of retreating Western firms. Investors are tepid on the tech recovery but Grab has the muscle for a deal.

Bausch pushes debt escape plans to extremes

19 Sep 2023

BHC’s CFO just quit as the drugmaker mulls a dicey plan to spin off its $5.5 bln Bausch + Lomb stake. Such engineering increasingly pits creditors against shareholders, in this case Carl Icahn and John Paulson. Stronger covenants would help, but CEOs keep getting more creative.

Arm’s IPO valuation rests on big dose of hope

7 Sep 2023

The SoftBank-owned chip designer is getting ready to list. In this Viewsroom podcast, Breakingviews columnists argue that even the company’s reduced price tag of $50 bln is still far too high, and debate what investors would have to believe to buy the shares.

Novartis $16 bln spinoff starts on a sickly note

5 Sep 2023

The $229 bln drugmaker is handing shareholders Sandoz, its generic-medicine unit and perennial problem child. High growth targets may work if the newly listed group revives its US business. But intense competition gives investors a reason to sell the stock they’re about to get.

SoftBank’s reduced Arm price tag is still too high

5 Sep 2023

The Japanese group may float its UK chip designer for $50-54 bln. That’s lower than initially hoped, but still implies an implausible future where revenue and profitability soar. If Arm merely grows at recent rates and nudges up margins, its market worth is more like $35 bln.

Twinkies maker will give food brands a sugar high

1 Sep 2023

Sweet-treat purveyor Hostess is mulling a sale to a conglomerate seven years after private equity firm Apollo took it public for $2.3 bln. At its current valuation, and as the pandemic sugar rush fades, there’s not much cream left for the next buyer to squeeze.

Capital Calls: Microsoft in the EU, Dollar General

31 Aug 2023

Concise views on global finance: The software giant will sell its Teams communications app separately from other software in the European Union; the discount retailer’s poor results reflect a more resilient US economy.

Body Shop sale may give Natura skin-deep makeover

30 Aug 2023

After offloading Aesop for top dollars, the Brazilian beauty giant may struggle to fetch the cosmetics brand’s original $1 bln price tag in a sale. The M&A spree reversal will simplify Natura’s structure. But sprucing up its surviving Avon arm and other labels looks hard.

Alphabet moonshots are ready for launch

29 Aug 2023

Google’s parent lost $6 bln last year on experimental ventures, such as health-data cruncher Verily and self-driving outfit Waymo. As CFO and former tech banker Ruth Porat takes charge of the unit, it’s probably a good time to consider carving out some and refocusing on others.

Microsoft rethink puts big tech M&A back on table

22 Aug 2023

The $2.4 trln tech giant will sell streaming rights to Ubisoft in a bid to get UK approval for its $69 bln Activision deal. The big concession is likely to work. It shows a path for tech giants to buy rivals, while sidelining regulators' fears that M&A will kill nascent markets.

US Steel should hold out for a better deal

21 Aug 2023

The world’s first $1 bln company has rejected a $7 bln takeover bid from rival Cleveland-Cliffs. The suitor is touting union support that could short-circuit a broader sale process. A merger makes strategic sense, so much so that the target’s shareholders deserve more.

Private equity bites off mostly what it can chew

17 Aug 2023

KKR, GTCR and others are clawing out of a deal bust with modest aims. A recent spate of sub-$2 bln buyouts, including ones involving Simon & Schuster, Avid and ADT, speaks to the trend. It’s a good way to stay active, but a $1 trln hoard of capital can’t sit unspent indefinitely.

Capital Calls: Selling Salesforce

15 Aug 2023

Concise views on global finance: After successfully agitating for change at the $200 bln software developer, Jeff Smith’s Starboard and Dan Loeb’s Third Point are offloading their stakes. It’s probably a good time to pocket gains considering the challenges ahead for Big Tech.

Mastercard’s African fintech bet is VC, but better

15 Aug 2023

Mastercard is investing in telecoms company MTN Group’s $5.2 bln mobile payments unit after backing an Airtel Africa-owned rival. The price is higher than past deals. But historical underinvestment in African fintech helps, as does its ability to spread money around.

Simon & Schuster deal contains a financial mystery

8 Aug 2023

KKR is buying the publisher of Stephen King and Colleen Hoover for $1.6 bln from Paramount after trustbusters blocked a sale to Penguin Random House. Even with modest growth, a 25% annualized return looks feasible for the buyout shop. What’s unclear, however, is the exit plan.

France wins more than Kretinsky in Atos breakup

1 Aug 2023

Billionaire Daniel Kretinsky will buy the IT group’s older assets for 2 bln euros including debt. Paris will be pleased that the other, sexier cybersecurity division stays French. Meanwhile the Czech tycoon gets the ailing unit with little relevance to his other recent purchases.

Saudi pays rich but logical price for Vale metals

28 Jul 2023

The kingdom is buying one-tenth of the $66 bln Brazilian miner’s nickel and copper arm. The $26 bln valuation on Vale’s base metals unit is steep, but cheaper than a full takeover. It also acts as a down payment on Saudi’s efforts to become an energy transition industrial hub.