Electrical Equipment

Losing bidder is indirect winner in Darty bid

27 Apr 2016

Furniture retailer Conforama has pulled out of a frenzied bidding war for the European electrical store. Their prudent approach that doesn’t count synergies made the price too high. Rival Fnac’s final bid is 70 pct above its original offer - but still looks like a good deal.

Darty bids will leave investors well upholstered

2 Mar 2016

The electrical retailer’s 662 mln pound merger with French bookstore Fnac has been gazumped by furniture retailer Conforama. Fnac could pay a lot more, and add cash. But Conforama’s parent seems intent on diversifying away from South Africa. Darty can sit tight for a better deal. 

Sharp deal with Foxconn is a messy milestone

25 Feb 2016

The ailing Japanese group picked a Taiwanese takeover over a domestic bailout. A $4.4 bln equity injection by the iPhone assembler shows Japan’s doors are not always closed to foreign buyers. Offering Sharp many safeguards helped. Now Foxconn has to make this pricey deal work.

Philips’ healthier state no cure for ailing peers

26 Jan 2016

The Dutch electronics group managed to grow underlying earnings more than expected. But while Philips is on course to spin off its lighting business, group like-for-like sales grew just 2 pct and CEO Frans van Houten is lukewarm on 2016. Rivals are unlikely to fare any better.

Siemens digital deal sets tone for M&A 2.0

25 Jan 2016

The German engineering giant has a history of value-destroying acquisitions. Yet buying U.S. engineering software maker CD-adapco may buck that unhappy trend. The capital goods market faces a digital revolution. More importantly, it looks like Siemens isn’t massively overpaying. 

Philips’ failed deal puts Chinese bids in the dark

22 Jan 2016

The Dutch firm’s sale of 80 pct of its specialty lighting arm to a Chinese fund has failed on U.S. security fears. Philips’ Lumileds unit has tech smarts and stateside operations, but this looks like regulatory overreach. Pending Chinese bids for hardware now seem less certain.

GE sells Haier a pricey entrée into U.S. kitchens

15 Jan 2016

The industrial giant is offloading one of the top makers of American cookers, dishwashers and fridges to the Chinese white-goods group. Snatching these appliances is a seminal moment for Haier - akin to Lenovo buying IBM’s PC unit. Shame the $5.4 bln price looks so overheated.

GE upset offers Asian buyers way into U.S. kitchen

15 Dec 2015

The group’s appliance unit is up for grabs after a $3 bln sale to Electrolux collapsed. Buying one of the top makers of U.S. cookers, dishwashers and fridges would be transformational for Haier or Midea of China. But Panasonic, Samsung, or Germany’s Bosch might have other ideas.

Electrolux’s GE failure leaves only faint stains

7 Dec 2015

The Swedish group will be deprived of extra growth after a U.S. acquisition was scotched by trustbusters, who felt that owning GE’s appliance unit would give Electrolux overmighty pricing power. The $1 bln fall in Electrolux’s value suggests investors never held such hopes. 

Samsung shows investors it can be generous too

29 Oct 2015

The South Korean group plans to buy back stock worth $10 bln and pay out up to half of its free cash flow in dividends. That will shrink its cash pile and may help the Lee family reorganise their empire. It’s a small but welcome sign that restructuring can benefit shareholders. 

Samsung’s future is more Intel, less Apple

7 Oct 2015

The South Korean giant’s operating profit topped $6 bln in the third quarter – the first improvement since 2013. While smartphone sales are struggling, Samsung’s chip business is increasingly powering its bottom line. Future growth will depend more on components than handsets.

Alibaba $4.6 bln retail deal dulls web-only charms

10 Aug 2015

Buying 20 pct of electronics chain Suning is a backward step for the Chinese e-commerce giant. Its motive may be gaining access to a delivery network. Yet Alibaba’s appeal has been its asset-light model. Defending its near-monopoly online will require more offline investment.

Samsung clan could call on mobile unit next

22 Jul 2015

Investors may wonder how Samsung Electronics fits into the plans of the Lee family behind the South Korean chaebol. A rejig of the $180 bln smartphone giant could spur higher dividends. But the Lees’ recent win against Elliott suggest independent shareholders may suffer first.

Sharp’s $1.9 bln bailout won’t cut it for long

14 May 2015

The ailing Japanese electronics group’s creditors have rescued it for the second time in less than three years. But its restructuring plan looks too timid given its level of financial distress. Without an improbable revenue pickup, Sharp’s future will remain on a knife-edge.

Elliott’s focus on Canon could pay off

1 Apr 2015

The U.S. hedge fund bought 10 pct of Axis, threatening Canon’s $3 bln friendly bid for the Swedish CCTV specialist. Canon is unlikely to give up. It could settle for a lower stake, and bide its time. But history suggests the already-rich deal could also get pricier.

Philips earns credibility with lighting selloff

31 Mar 2015

The Dutch group sold 80 pct of its lighting components unit for $2.8 bln. An Asian tech fund paid a surprisingly high 1.65 times last year’s sales. Buyout firms’ hunger for corporate cast-offs helped lift the price. A bigger test looms: splitting off the main lights business.

Honeymoon really is over for Siemens boss

27 Jan 2015

Lacklustre quarterly results hit shares in Europe’s largest industrial group. After 18 months, CEO Joe Kaeser has not lived up to early hopes. He’s completed some smart disposals. But he’s also overspent on shale and, by centralising power, hobbled unit managers.

Samsung looks stuck in a dynastic value trap

30 Oct 2014

After a miserable year, the South Korean conglomerate’s shares trade at just eight times trailing earnings. Though that’s probably overdone, a smartphone revival is far from guaranteed. The Lee family’s succession plans also mean hopes for a bigger dividend may be premature.

Philips discount may survive breakup

23 Sep 2014

The Dutch electronics group has put reality ahead of its 120-year history by spinning off lighting, and merging healthcare and consumer. There’s no quick fix for the former. The rump may still suffer a conglomerate discount. Philips’ problems can’t be solved by flicking a switch.

Electrolux on better side of $3.5 bln GE deal

8 Sep 2014

The Swedish firm is buying GE’s U.S.-focused appliances unit in an all-cash purchase part-funded by a rights issue. It’s a win for Electrolux. The U.S. market for ovens, fridges and dishwashers is more attractive than Europe’s, and scale helps offset raw material cost pressures.