Industrials

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.

Siemens’ smooth succession plan may stall breakup

19 Sep 2019

The $90 bln industrial behemoth has promoted COO Roland Busch to deputy chief executive, putting him in prime position to replace CEO Joe Kaeser in 2021. The perfectly-crafted plan offers clarity and continuity. An insider may however, be slower to simplify the sprawling company.

Luxury yachts IPO tests Chinese salvaging skills

18 Sep 2019

Ferretti, the maker of boats beloved by stars like George Clooney, is cruising to a Milan listing a decade after its shipwreck. State-owned Weichai spent 470 mln euros to rebuild the brand from near insolvency. The Chinese group needs an LVMH-like valuation to double its money.

Buyout offers exit if Thyssen gets stuck in lift

17 Sep 2019

Advent, Cinven and ADIA are lining up a bid for the German conglomerate’s elevators, the FT says. Thyssenkrupp may prefer trade rival Kone’s greater scope to offer an enticing price. But private equity has less to worry about from the EU’s recently reappointed antitrust chief.

Stakeholder capitalism gets German reality check

4 Sep 2019

U.S. Democrats and even CEOs are saying companies should be run for workers, not just investors. In a market where employees already have a say, AMS’s $4.8 bln bid for Osram reveals the flaws. Boards can do little to rebuff the highest cash offer, even if the buyer is unstable.

UK building supplier adopts Peltz’s American dream

3 Sep 2019

Ferguson plans to spin off its British unit and focus on the United States, as suggested by the activist. Trading more in line with U.S. peers should boost shares in the 14 bln pound group. But UK-based holders could make moving the primary listing to New York a tough project.

CNH can release valuation brakes with truck split

30 Aug 2019

The $14 bln Italian-American tractor-to-van group may spin off its struggling commercial vehicle unit, Bloomberg reports. Investors might pay more for a purer agricultural play. And independence might help the subscale vehicle business, whether on its own or in stronger hands.

Buyout barons play good guy in German lighting M&A

20 Aug 2019

Bain and Carlyle’s $4 billion Osram bid may be trumped by chipmaker AMS. Trade unions, which sit on the target’s board, are more worried by the latter than the former. While Chairman Peter Bauer may hear out the Austrian suitor, its heavy debt load will be hard to ignore.

AMS takes a leap of faith with Osram offer

12 Aug 2019

The Austrian company that supplies Apple has made a 4.3 bln euro offer for the German lighting firm including debt. Diversifying is good, as is a plan is to exploit the growth of driverless cars. But piling on debt to clinch the deal is a risk given ambitious synergy assumptions.

GE turnaround is barely past stalling speed

31 Jul 2019

CEO Larry Culp upped the $92 bln conglomerate’s earnings outlook a tad. But costs are up, revenue down, the power business looks drained and the grounding of Boeing’s 737 MAX could deplete cash by $1.4 bln this year. What progress there is doesn’t add up to a convincing recovery.

DowDuPont shows M&A demands timing – and humility

25 Jul 2019

Two chemical companies merged to form a $130 billion behemoth and then split into three. The goal was to boost shareholder value. That has so far been thwarted by the business cycle and other factors. Complexity has also played a role. It’s a lesson for ambitious dealmakers.

Japan-Korea spat returns chip price error message

25 Jul 2019

Earnings at semiconductor giant SK Hynix plunged 88%, weighed down by a worldwide glut. Yet shares rose on hopes that Tokyo's export curbs to South Korea will depress supply and lift prices. The risks of weaker demand and supply chain ruptures suggest the rally looks premature.

Philips will grow into its healthier valuation

22 Jul 2019

The 37 bln euro medical-technology group has erased its valuation discount to Siemens Healthineers. That is justified by strong orders unveiled in second-quarter results. CEO Frans van Houten’s company offers the same growth story as its German rival, but with fewer distractions.

BASF’s acid stings complacent investors

9 Jul 2019

The 55 bln euro chemicals group lost 6% of its market value after a trade-war profit warning. Since results are closely linked to industrial production, it’s odd that the company was valued at a historic premium while the global economy cooled. Peers’ shares will feel the burn.

German $4 bln lighting bid is radiant enough

4 Jul 2019

Bain and Carlyle’s offer for Osram Licht is fairer than the small premium suggests, especially as returns could be humdrum. While the board and investors might have hoped for more, rejecting the deal will leave shareholders stuck with a shrinking company in need of restructuring.

Bayer takes small steps to placate shareholders

27 Jun 2019

The German drugs and seeds group has hired an expert adviser for its litigation over weed killer Roundup. That boosts the chances of a swift settlement. Yet, if boss Werner Baumann can’t revive Bayer’s lowly valuation and challenged business, pressure to break it up will grow.

Nelson Peltz snaps up $16 bln Brexit fixer-upper

13 Jun 2019

The activist investor has taken a 6% stake in London-listed construction group Ferguson. Selling the UK unit, which has been hit by dismal growth since the country voted to leave the EU, would boost profitability. Relisting in New York could help close a valuation gap with peers.

Boeing order drought compounds 737 MAX woes

12 Jun 2019

Airlines have turned stingy this year, ordering fewer planes from the $200 bln aerospace giant and 100 bln euro rival Airbus. Boeing already faces a long delay getting its grounded jet back in the air. A weakening aviation market is the last thing the company and its owners need.

Raytheon can home in on better deal

10 Jun 2019

The $52 bln maker of Patriot missiles is bringing a near-pristine balance sheet and better operating margin to a merger that seems to benefit partner UTC more. A tie-up could be attractive as defense budgets slow, but Raytheon has room to seek better terms, or bide its time.

Fiat-Renault deadlock is opportunity for Peugeot

6 Jun 2019

The 33 bln euro auto marriage stalled after French state meddling. Fiat might find an easier alternative with Carlos Tavares’ carmaker, given its historically looser government relations and 9 bln euro cash pile. It might also allow a cleaner exit for Fiat owner John Elkann.