Industrials

Alstom gains upper hand in Franco-German rail deal

27 Sep 2017

The French group’s shareholders will own nearly half the combination with Siemens’ train unit, despite contributing just a third of the operating profit. Alstom also keeps its CEO and head office. Hefty cost savings and the creation of a European champion justify the concessions.

Fortum price for Uniper implies another bite later

27 Sep 2017

The Finnish power group will offer 8.1 billion euros for its German target. E.ON, with 47 percent of Uniper, is on board, but other shareholders can reasonably expect a bigger premium. If Fortum wants full ownership, it may take more time – and more money.

ABB’s short-term value push takes $2.6 bln detour

25 Sep 2017

The Swiss group is shelving a $3 bln buyback programme to acquire GE’s non-core industrial solutions unit. On the surface it’s a strange move for a company that’s faced calls to simplify and boost margins. But a low price and high synergies mean ABB investors might still prosper.

Agarwal’s Anglo wager is risky way to plot breakup

21 Sep 2017

The Indian billionaire is doubling down. Paying as much as 1.5 billion pounds to raise his stake in the UK-listed miner to 20 pct may be a way of trying to force a breakup. But unpredictable commodities prices and South Africa’s volatile politics could scupper any such plans.

CRH deal cements its U.S. infrastructure bet

21 Sep 2017

The building materials company is buying Kansas-based Ash Grove for $3.5 bln including debt. It’s a full price for a group which likes to buy cheap. Despite doubts over President Trump’s pledge to rebuild highways and bridges, pushing into its key market makes sense for CRH.

Tata Steel JV pays ThyssenKrupp four dividends

20 Sep 2017

A historic joint venture with India's Tata will unshackle the German group from the fickle, capital-intensive steel industry. Lower pension liabilities, a share of synergies worth 3 bln euros and a more robust balance sheet are further benefits. Workers will fare better too.

DowDuPont gives blueprint for activist compromise

12 Sep 2017

It hasn't been pretty. But several activists, lots of money, plenty of fighting and years later, the merging Dow-DuPont reached a plan that shareholders, even both Dan Loeb and Nelson Peltz, now support. Somewhere in this chemical romance, there's a lesson for P&G and others.

Pirelli’s mooted IPO valuation looks overinflated

5 Sep 2017

The Italian tyremaker plans to relist. Pirelli’s high-end business may deserve a premium to peers, but an estimated enterprise value of 12 billion euros, far above what owner ChemChina paid in 2015, looks optimistic. High debt and complex ownership may also spook investors.

United Tech breathes rarefied air to bulk up

5 Sep 2017

The conglomerate is paying $30 bln including debt for Rockwell Collins. The combination makes sense but, with a weak 5 pct return on investment, UTC is paying up for aerospace scale. Elusive revenue benefits or a lucrative breakup are needed to prove the deal's potential.

Rebooted UK-French software merger rewards patience

5 Sep 2017

After two botched attempts in as many years, French industrial group Schneider and UK software maker Aveva are trying to hook up again. The $3.9 bln deal is as complex as it is financially alluring. With past glitches ironed out, the merger has a good chance of becoming reality.

United Technologies’ avionics bid looks airworthy

30 Aug 2017

The conglomerate’s potential acquisition of Rockwell Collins should deliver enough cost savings to justify paying a reported $23 billion. Greater size also promises increased negotiating heft with Boeing and Airbus. Investors have good reason to clear this deal for takeoff.

Elliott finds part-victory in Akzo defeat

16 Aug 2017

The U.S. activist failed to arm-twist the Dulux paint maker into a merger with PPG. The Dutch group has, though, committed to a full breakup and put two solid new members on the board. It’s a decent result for Akzo’s investors – although less than Elliott’s might have wanted.

Marchionne’s Maserati spinoff lacks traction

15 Aug 2017

Fiat Chrysler’s boss is considering selling the group’s premium brands, according to a report. He staged a similar trick with the firm’s high-end Ferrari brand. Yet Maserati and Alfa Romeo are tiny and need Fiat’s production lines. Staying part of a larger group makes more sense.

Akzo and Elliott are trapped in a lose-lose battle

11 Aug 2017

The Dutch paint maker has won a legal victory over its biggest shareholder, which is trying to oust the chairman. The increasingly pointless fight is likely to drag on beyond September’s shareholder meeting unless new CEO Thierry Vanlancker can make both sides see sense.

Growing Siemens will be harder than rewiring it

11 Aug 2017

CEO Joe Kaeser has delivered higher margins and healthy shareholder returns by making the engineering behemoth slimmer and more agile in his first four years. He has four more to build on his success. The risk is he will repeat past mistakes by indulging in costly acquisitions.

Glencore’s debt purge creates enviable problems

10 Aug 2017

Surging commodity prices are helping Chief Executive Ivan Glasenberg to slash debt faster than planned and restore profitability. That gives the mining giant scope to hand more money back to investors or make bigger bets on growing demand for resource-hungry electric vehicles.

United Tech avionics bid may start bigger dogfight

7 Aug 2017

The $95 bln conglomerate is mulling an offer for Rockwell Collins, right after Boeing’s margins-sapping entry into the business. Honeywell is under pressure to sell its unit. The combination of earnings and activist pressure leaves aviation executives with some tough choices.

Shipyard spat shows Macron will put France first

31 Jul 2017

The French president angered Italy and exposed the limits of his ardor for the European Union and free markets by nationalising STX France. The silver lining is that he has a better chance of pushing through reform if he makes a show of protecting jobs and the national interest.

U.S. Steel forges best argument against trade war

26 Jul 2017

Rising demand and restrained imports led to blowout earnings at the $4.7 bln steelmaker. While management's hopes for tariffs on bogus national-security grounds are receding, investors are better served by a focus on upgrading high-cost production over protectionist lobbying.

Carmakers need more collaboration, not less

24 Jul 2017

Germany’s VW, BMW and Daimler may have illegally colluded on emissions cleaning systems. The scale of potential misconduct is hard to judge. But if consumers don’t suffer, big technological change and bloated R&D budgets suggest more carmaker cooperation is nothing to be feared.