Industrials

ValueAct slides an atypically ajar shōji

14 Apr 2020

After a victory at Olympus, the U.S. investor is trying to push open the latticed door at $4 bln JSR. Unusually for a Japanese company, the synthetic rubber and chemicals maker has a foreign CEO and regularly pays out cash. That means it could be receptive to an outsider’s ideas.

Hong Kong is ripe for more tycoon-led buyouts

23 Mar 2020

The Fung clan wants to take Li & Fung private. Online retail, the trade war and Covid-19 have battered the supply-chain group, making a $1.4 bln valuation look generous. As such opportunistic deals gather pace, investors in the Asian hub may start to demand more of buyers.

KKR spots brass in British muck

19 Mar 2020

The private equity group’s infrastructure arm is buying water company Pennon’s trash management unit for 4.2 bln pounds. The valuation looks rich, given recent market moves. But lengthy contracts and growth in recycling mean co-CEO Henry Kravis needn’t fear a grubby return.

Thyssenkrupp’s big lift deal puts time over price

17 Feb 2020

The German group has narrowed the field of bidders for its elevator division to two private equity consortia. Trade buyer Kone’s 17 bln euro premium offer is out. Thyssenkrupp insists an IPO remains an option, but its need for a clean, quick deal implies otherwise.

Kone may hold trump card in Thyssenkrupp endgame

13 Feb 2020

The Finnish lift maker could waive a requirement for its 17 bln euro German elevator bid to hinge on the upshot of antitrust probes. Kone’s plan can fly if it sells any forced disposals to partner CVC. Either way, Thyssenkrupp will find it harder to reject its premium offer.

Thyssenkrupp’s ailments give edge to buyout barons

29 Jan 2020

Finnish lift maker Kone is offering 17 bln euros for the German steel giant’s elevator unit. That’s 6% more than the closest private equity bid. But competition regulators could hold up the juicier deal. Given its dismal profitability, Thyssenkrupp may prefer the cleaner option.

Siemens CEO’s climate blog sends semi-woke signal

13 Jan 2020

Joe Kaeser has admitted the 98 bln euro German engineer should not be working on Australia’s Adani coal mine, but cannot pull out. Creating a panel to vet deals for their greenness, and possibly nix them, is partial penance. The CEO’s public disapproval may be a better deterrent.

M&A bankers will turn climate risk into clients

19 Dec 2019

The financial impact of global warming is one of the biggest strategic issues CEOs face, yet it plays a small role in dealmaking. That might change in 2020 as shifting regulation and consumer habits start to affect the bottom line, giving climate-conscious advisers an edge.

DuPont’s latest reinvention risks deal fatigue

16 Dec 2019

The $26 bln sale of its nutrition unit looks smart on paper. Yet DuPont has been reworking itself for four years, with no real boost for shareholders. Buyer IFF is still digesting another purchase. And closing is over a year away. Even the right deal can be too much of a grind.

Sinking Thyssenkrupp needs more than a quick lift

21 Nov 2019

The German group’s shares fell after it cut its dividend. Selling its elevator unit will raise cash but leave a loss-making rump. With restructuring, the steel-to-ships maker could be worth much more than the current 7.5 bln euros, but boss Martina Merz faces an arduous climb.

ArcelorMittal win will help India heal debt wounds

15 Nov 2019

The country’s top court squashed a decision that threatened the steelmaker’s $6 bln bid for Essar through a new bankruptcy regime. The Mittal family’s homecoming can go ahead. It’s also a timely boost for lenders and investors needed to re-energise the flagging economy.

Buyout groups risk pricey scrum in German lifts

13 Nov 2019

Private equity managers are teaming up to buy Thyssenkrupp’s elevator unit, worth maybe 17 bln euros. That smacks of the ill-fated club deals that epitomised the last buyout boom, although the target’s stable cash flows makes a blowup unlikely. The biggest risk is overpaying.

ArcelorMittal gets convenient alibi for Italexit

8 Nov 2019

The steel giant wants to pull out from an agreed purchase of top European plant Ilva, blaming its loss of legal immunity. Quitting would spare ArcelorMittal the cost of upgrading the toxic site. That’s handy while global steel consumption is seen to be falling.

Siemens will sand down its valuation discount

7 Nov 2019

The German industrial group had a good fourth quarter. Shares are valued at 15 times forward earnings, compared with 19 times for peer ABB. If Chief Executive Joe Kaeser can achieve his relatively modest 2020 earnings ambitions, he can close that gap with his European rival.

Larry Culp’s mission: be GE’s least memorable CEO

30 Oct 2019

GE is leaner and less indebted. Its jet and health divisions grew in the third quarter and cash flows are improving. Culp’s predecessors specialized in big gestures. If he can just keep GE on a stable path, with fewer one-offs and write-downs, he’ll be its best chief in decades.

Renault Bollorexit makes Fiat deal slightly easier

11 Oct 2019

Thierry Bolloré’s departure as CEO of the French car company further distances it from the Carlos Ghosn era. That should benefit a reset with Nissan’s new leadership, which is needed to appease the French state. It also simplifies the management choices for a Fiat-Renault combo.

German lighting mess has glimmer at end of tunnel

7 Oct 2019

AMS’s failed bid for Osram leaves the Munich-based group looking friendless and saddled with a blocking stake that might deter private equity. Yet Bain and Advent could afford to offer more without destroying their returns. If they do, it may suit seller, unions and even AMS.

Suez turnaround is stuck on an amber light

2 Oct 2019

Empire-building has weighed on the French utility’s returns. A new focus on the bottom line is thus a win for activist Amber Capital. Still, a share price dip on Wednesday suggests investors aren’t ready to take CEO Bertrand Camus’s promises of better top line growth on trust.

Bain’s Osram bid is insufficiently illuminating

26 Sep 2019

The buyout group and new partner Advent may outdo a 4.3 bln euro cash offer for the German lighting group from Austria’s AMS. Yet the latter’s proposal must lapse before shareholders can see what Bain is bidding - which may be less appetising. Osram should stick to its guns.

Thyssenkrupp CEO exit will help its elevator pitch

25 Sep 2019

Guido Kerkhoff is on his way out at the German industrial conglomerate after 14 months, a 40% share price drop and various U-turns on strategy. His interim replacement backs a plan to sell the lifts business. Just as well since this offers the best chance of boosting valuation.