Industrials

Prysmian’s U.S. cable tie-up is well thought out

4 Dec 2017

The Italian cable-maker is buying loss-making U.S. rival General Cable for $3 bln including debt. The hefty premium is deserved if the buyer can deliver chunky cost savings. In a sector where scale is all-important, the deal helps Prysmian see off European and Chinese opponents.

Microchip boom short-circuits Singapore’s growth

28 Nov 2017

Revised GDP revealed a surprisingly strong 5.2 pct quarterly lift for the city-state's $300 bln economy. As in other parts of the world, however, the expansion has yet to power wages or jobs. Cyclical semiconductor output flatters the figures and warrants investor caution.

Emerson’s $29 bln bid for Rockwell has a big flaw

22 Nov 2017

That’s the fact that much of the takeover approach, while reasonably priced, is in Emerson stock. Rockwell’s board is using that to justifiably question the bidder’s long-term plan, and questionable synergy estimates. It’s hard to see how anything other than cash can win the day.

Akzo’s no-deal still worse than a good deal

22 Nov 2017

The Dutch paint maker is temporarily solo after talks with U.S. peer Axalta foundered. That combination, good on paper, was challenged by the two companies’ uneven size and likely job cuts. Even so, Akzo’s future if it’s determined to remain single is unappealing.

Viewsroom: AT&T’s $85 bln deal runs into static

17 Nov 2017

The telecom firm’s acquisition of Time Warner, owner of CNN, may hit regulatory hurdles in D.C. President Trump’s caustic tweets against the news network look self-interested, but watchdogs could yet legitimately rethink norms of competition. Plus: GE searches for a way forward.

Carillion meltdown shows risk in return-free world

17 Nov 2017

Creditors of the UK construction group face losses in a looming restructuring. The company expanded too fast and took on risky contracts. Meanwhile, BBB-rated Veolia is borrowing at sub-zero yields. Investors should remember that even central banks can’t make default impossible.

Emerson ratchets up heat on Rockwell – and itself

16 Nov 2017

The U.S. industrial group raised its bid for the automation specialist to $29 bln. A near-30 pct premium puts pressure on Rockwell’s long-serving leadership to come to the table. In pursuing a long-term logical tie-up, though, Rockwell looks to be punishing its own shareholders.

Audit defect throws wrench in GKN re-engineering

16 Nov 2017

CEO-designate Kevin Cummings will leave the UK car parts and aerospace group after it unearthed more accounting problems at the unit he ran. The mess reinforces the case for breaking the company into two parts. Yet the governance vacuum makes quick fixes harder.

GE’s shaman exorcises ghosts of false expectations

13 Nov 2017

It doesn't take much imagination at work to grasp John Flannery's approach to the $178 bln conglomerate. He has halved the dividend, cut earnings guidance and questioned GE's portfolio of industrial assets. Next up is a total restructuring of GE's bloated, under-engaged board.

Akzo Nobel-Axalta merger is a hostage to history

8 Nov 2017

A proposed blend of the two paint makers could produce colourful cost savings. That must mean job losses – and Akzo is the less efficient. Yet the $23 bln Dutch group deflected a bid from PPG saying cuts were a no-go. It’s hard to see how it could do the requisite U-turn now.

Lycra is stretch project for China’s budding LVMH

7 Nov 2017

Shandong Ruyi snapped up the sporty fabric brand from a subsidiary of Koch Industries for more than $2 billion. That advances the firm’s quiet aim of becoming China’s Louis Vuitton. While less bold than moves by other Chinese conglomerates, it just might work.

Axalta is a chip in DowDuPont’s paintwork

2 Nov 2017

Activist Nelson Peltz once pilloried chemicals giant DuPont for selling its coatings business to private equity. He was right. Axalta is now weighing a merger with Akzo Nobel. With a bit more love, it might have given investors in what’s now DowDuPont a 29 percent annual return.

Emerson’s tilt at Rockwell lacks killer blow

31 Oct 2017

The rejected $28 bln offer for the U.S. automation group represents a premium of just 15 pct, paid partly in stock that has systematically undershot Rockwell’s. With valuations high, an all-cash bid might have tested the target’s independence. That looks beyond Emerson’s means.

Axalta deal complicates Akzo’s juggling act

30 Oct 2017

Fresh from deflecting a takeover, the Dutch group is considering a merger of its paints unit with its U.S. rival. A combination makes sense. But new CEO Thierry Vanlancker is already grappling with weak results and a chemicals spinoff. That raises the risk of dropped balls.

Whirlpool and Sears engage in war of weaklings

24 Oct 2017

The appliance maker will no longer supply the retailer with most of its brands after a price-hike request was denied. Whirlpool cited higher costs and growing competition. Sears is struggling to keep its business alive and out of bankruptcy. Neither has the upper hand.

GE has become the ultimate industrial lightweight

23 Oct 2017

Earnings that even new CEO John Flannery called “horrible” put fresh pressure on a stock down over 25 pct this year. The last surviving original Dow member now has by far the lowest weighting of any share in the index. It’s an embarrassing sign of the storied firm’s troubles.

Spare GE jet is symbolic target of Flannery sweep

19 Oct 2017

Scrapping a second plane that followed former boss Immelt around, just in case, is an easy sop for shareholders. The new CEO needs them on side as he mulls possible bigger changes at the $200 bln industrial giant, such as dropping long-held earnings targets or cutting dividends.

Spanish toll-road bid steamrollers Benettons

18 Oct 2017

ACS has made a 17 billion euro offer for infrastructure operator Abertis, using the balance sheet of its German unit Hochtief. The price is better than a rival bid from Atlantia, controlled by Italy’s Benetton family. It owes more to cheap debt than economic sense.

ACS faces bumpy road to join Abertis battle

13 Oct 2017

The Spanish builder is planning a cash-and-share offer for the toll-road operator using its German Hochtief unit. Beating Atlantia’s $20 billion bid faces several hurdles. The Italian group has offered more cash. For ACS, taking on a lot more debt could also be problematic.

German scrap metal IPO hinges on green alchemy

6 Oct 2017

Befesa, which turns waste steel dust into more expensive zinc, could be valued at up to 1.6 billion euros in a Frankfurt listing. Buyout groups offered less earlier this year. Hope that emerging economies will tighten up environmental rules may justify the rich price.