Engineering

Paris forces GE into over-engineered Alstom bid

19 Jun 2014

Take 3: out goes a simple $16 bln cash deal with some job promises. In comes a string of joint ventures to satisfy France’s taste for alliances and industrial champions. This looks less shareholder-friendly but more deliverable, and pulls GE further ahead of rival bidder Siemens.

Siemens offers Alstom a real alternative

17 Jun 2014

The German group and Mitsubishi Heavy proposed to buy some of the French company’s energy assets. Compared to GE’s friendly 11.4 bln euro bid, there’s less cash, less industrial sense, and more complexity. So this is still a Plan B. But it’s credible and politically astute.

DTZ gets solid foundations in $1.1 bln sale to PE

16 Jun 2014

Australia’s UGL is selling the property services group to pay down debt. New private equity owners TPG and PAG Asia bring capital and management expertise. That could be enough to allow DTZ to challenge rivals CBRE and Jones Lang LaSalle, which are more than twice its size.

Siemens needs more than Mitsubishi to win Alstom

11 Jun 2014

The German engineer has teamed up with Japan’s Mitsubishi Heavy Industries in its potential bid for Alstom. A joint approach lowers antitrust risk and cash outflows for Siemens. But trumping GE’s rival $15.4 bln proposal and job commitments will still be difficult.

GE’s new Alstom bid makes Siemens a distant second

28 May 2014

The U.S. conglomerate pledged new jobs and an asset swap to improve its $16 bln offer for Alstom’s power units. France seems to be warming to a bid already backed by the board. Rival bidder Siemens looks increasingly like a stalking horse, used merely to wring more out of GE.

Alstom chase is distraction from Siemens revamp

7 May 2014

The German engineering giant’s long-awaited new strategy sensibly focuses on improving efficiency and cutting slack. A possible Alstom deal comes at a bad time, even though the French rival would be a good industrial fit. Siemens management has enough to deal with in-house. 

Alstom’s train future is with Siemens, not GE

6 May 2014

Paris opposes an offer by the U.S. group to buy Alstom’s power business unless the French company gets the American’s transport assets in exchange. That is a barmy idea. What Alstom should try instead is use GE’s money to build a pan-European train business with Siemens. 

GE in hard-to-beat 11.4 bln euro bid for Alstom

30 Apr 2014

The U.S. conglomerate’s offer for the French group’s power assets is at the upper end of a reasonable price range. Germany’s Siemens will find it hard to improve on a fair offer favoured by Alstom’s board - and it would probably bring less cash to the table.

ABB shocker raises questions about profit target

29 Apr 2014

The Swiss engineering company’s shares tanked 7 percent on news that its power systems unit faces bigger problems than thought. Persistent operational issues and increased restructuring efforts will make it hard for the group to meet its 2014 profit target.

Siemens’ Alstom proposal attractive but risky

28 Apr 2014

The German engineer has offered to swap assets with its French rival after a possible GE/Alstom deal ran into government opposition. Exchanging trains for turbines could create two strong players, and generate larger synergies. But antitrust obstacles may be tough to overcome.

Alstom split would energise business units

25 Apr 2014

Too much debt, a ropey rating and looming refinancing needs are Alstom’s key problems. The French engineering group would need more time to fix them than its shareholders seem to allow. A split would make sense, and GE can help.

French M&A: a guide for foreign buyers

24 Apr 2014

Deals for Publicis and Lafarge belie the sneers that France is closed to outsiders. If GE really wants to buy all of Alstom, it needs to be sensitive to local politics. Save some top roles for the French side. Maybe even rename the enlarged, “Paris-based” group Alstom-Electric.

GE/Alstom deal rumours test French reform drive

24 Apr 2014

Shares in the Paris-based engineer jumped 14 pct on reports it has received a bid. Alstom vaguely denied the story. But mere talk about a sale to the U.S. conglomerate will embarrass the French government just as its business-friendly reforms are proving a hard sell domestically.

Weir may struggle to extract a merger from Metso

1 Apr 2014

The Scottish engineer has tentatively bid for its $5 bln Finnish rival. A merger makes sense. But Metso has just shed a problem unit, has clear self-help plans, and is at a cyclical low thanks to its focus on mining. With two powerful backers, the Finns can afford to be patient. 

Panama Canal can and should avoid project meltdown

28 Jan 2014

Work has slowed down to a crawl over a cost overrun dispute. Both sides have a strong incentive to fix the problem. The key question is how to finance the remaining costs while an arbitrator decides who owes what. Any solution is likely to pile more risk on the contractors. 

ABB can power past power outage

22 Jan 2014

A day after France’s Alstom shocked markets with a profit warning, ABB has followed suit. But while the French engineer faces structural challenges, its Swiss peer’s trouble is more contained. Still, ABB’s high valuation leaves its shares vulnerable to unpleasant surprises.

Amec engineers $3.2 bln strategic shift

13 Jan 2014

The UK engineer is set to buy U.S.-listed rival Foster Wheeler. The structure is solid: a slim 12.8 percent premium, decent cost cuts, and payment half in stock to keep debt down. Investors just need to be satisfied that a big push into downstream energy makes sense.  

New Siemens boss calms market hopes of quick win

7 Nov 2013

Joe Kaeser offered lots of cash to the German industrial giant’s shareholders - a generous dividend and a 4 bn euro share buyback. But the promised 15 pct hike in earnings per share in 2014 is half what analysts hoped for. Kaeser needs time to engineer a new long-term strategy.

Stock market is best stop for Alstom trains

6 Nov 2013

The struggling French engineering group is considering selling a stake in its transport unit to raise money. Hiving off 30 percent of the division could raise about 1 billion euros. Strategic buyers would be hard to find for a minority stake. A public listing looks like the best option.

Siemens’ task is about more than cutting jobs

30 Sep 2013

Germany’s industrial giant is slashing headcount by 15,000. Though it has plenty of work on its books, streamlining the workforce is necessary. Yet Siemens’ woes will persist until it tackles its tendency to mismanage large-scale projects and overpay for acquisitions.