Industrials

Khashoggi is ghost at Milken’s Abu Dhabi confab

15 Feb 2019

Financiers at the billionaire’s annual Gulf shindig adopted a Trumpian shrug over Saudi agents’ murder of the dissident journalist. Lucrative forthcoming Aramco deals and White House support for the regime explain why. But the issues raised by Khashoggi’s death still linger.

Farting cows can propel DSM higher

14 Feb 2019

The Dutch group’s feed supplements reduce bovine flatulence, a big source of methane emissions. That’s not yet on the market, but shows how DSM’s nutrients and chemicals can defy the economic slowdown. A robust balance sheet means it’s financially sustainable, too.

The Exchange: Hollowing out white-collar jobs

13 Feb 2019

In “The Globotics Upheaval” Richard Baldwin predicts machine learning and instant communications will disrupt service workers just as automation and offshoring upended Western factories. He tells Breakingviews what’s coming, and what we can do to slow it down.

Irish cement maker needs repairs over demolition

6 Feb 2019

Activist Cevian has taken a stake in $25 bln building-products group CRH. A spinoff of the undervalued U.S. business might unlock value but would leave an awkward European rump. Its best hope for appeasing shareholders is to spruce up margins, and improve its governance.

GE’s return to the black is a baby first step

31 Jan 2019

A profit in Larry Culp’s first quarter as CEO can’t hide his challenge. The $80 bln conglomerate’s troubled power unit dented sales and hammered earnings in its trio of core businesses, and disposals have yet to meaningfully cut leverage. He needs to put more imagination to work.

Arconic lays bare limits of activist minority rule

22 Jan 2019

Elliott had a hand in appointing most directors, the CEO and the chairman, and encouraged a sale to Apollo. The board has nixed the deal, tanking the stock. Paul Singer’s firm tried to get its way with only a smallish stake; it now owns the company’s problems, not their solution.

EU can afford to shunt Siemens-Alstom to a siding

18 Jan 2019

Margrethe Vestager may well block the rail groups’ merger. That would rile German and French politicians yearning for a European champion to face down distant fears of Chinese dominance. But if the antitrust tsar pulls the plug, neither Siemens nor Alstom would suffer too much.

GE aircraft-leasing sale would be $40 bln moonshot

8 Jan 2019

Buyout firm Apollo may bid for the best bit of GE’s finance arm, testing CEO Larry Culp’s commitment to decluttering the U.S. conglomerate. Unless he can get a knockout price, though, selling a crown jewel could leave Culp looking like he’s out of options.

Gatwick’s new French pilot has tougher flight path

27 Dec 2018

Construction group Vinci is paying $3.7 bln for a majority stake, days after the London airport grounded flights due to stray drones. The price looks toppy given Gatwick’s already-slick operation and Brexit uncertainties. Seller GIP and its co-investors had a better landing.

Activism anxiety will grip French establishment

12 Dec 2018

Between the state and raiders like Vincent Bolloré, France is no stranger to meddling investors. But this year some blue-chips will face cage rattling. Pernod is just the start. The likes of Saint-Gobain, Danone, Renault - and even Bolloré’s Vivendi - are no longer off-limits.

General Electric can go from bad to worse in 2019

11 Dec 2018

The industrial group led by Larry Culp is mostly being propped up by its aviation arm as its power business sucks wind and its finance unit consumes cash. The risk is that cyclical, financial and competitive headwinds kick the strongest leg of the stool out from shareholders.

The Exchange: Joe Kaeser

10 Dec 2018

It’s hard to imagine a company embodying as many of the challenges and opportunities of 21st century capitalism as Siemens. The German conglomerate’s CEO swings by Times Square to discuss trade, breakups, power, automation, labor, Saudi Arabia and lots in between with Rob Cox.

Hadas: Conglomerates will never die

5 Dec 2018

The break-up of GE and United Technologies marks the end of an era, but there will always be good reasons to bind together diverse businesses. Removing barriers brings synergies, spreads talent and saves on taxes. The trick is to avoid stultifying complexity and financial games.

German lighting buyout relies on benign trade view

27 Nov 2018

Bain may be looking at Osram. Its stock has been hammered, and growth prospects are good. But the company that was spun off from Siemens is exposed to trade wars. A deal would show that private equity’s risk appetite has yet to be dulled by volatile markets and economic concerns.

Hello concentration, goodbye conglomeration

27 Nov 2018

United Technologies is splitting into three while also closing a deal that creates an aerospace-parts giant. Like DowDuPont and others, activists and a need for competitive heft leave companies little choice – though tariffs and economic concerns stole $96 bln UTC’s show.

Colfax trades aging industry for aging Americans

19 Nov 2018

The industrial outfit is pivoting to healthcare by acquiring orthopedic-device maker DJO from Blackstone for $3.2 bln. Baby boomers’ growing need for knee braces and implants ensures a healthy market. But loading up on debt makes this a stressful way to chase perpetual youth.

GE may be canary in credit market’s coal mine

15 Nov 2018

The firm’s bonds tanked this week even as an asset sale briefly lifted its shares. That’s a warning shot for all credit investors. U.S. companies carry more debt than ever, and quality has deteriorated. Rising interest rates and slowing growth could make this a big problem.

PG&E woes show climate is clear and present danger

14 Nov 2018

The California utility may be to blame for the wildfire that’s claimed 48 lives. Its value has halved and it may run out of cash. The planet’s warming is already worsening fires, floods, and water scarcity. Yet most investors and companies still treat it as a longer-term risk.

Army contractor’s best defence is board grenade

13 Nov 2018

UK military contractor Babcock’s shares fell after an analyst accused it of misleading investors. The group rejects the criticisms, but slowing sales, and the government’s desire to cut costs are worrying. Replacing long-standing Chairman Mike Turner would give some reassurance.

GE eases blow with Baker Hughes share sale

13 Nov 2018

The $70 billion industrial company is selling a chunk of its 62 percent stake in the oil-services firm a day after it said it urgently needed cash. The timing isn’t optimal. But it is better to do something than nothing, and GE can test the waters while saving dignity.