Industrials

Bombardier clears Canadian funds for takeoff

11 May 2017

In a rare revolt, pension funds ejected the train and plane maker's executive chairman. But it took a long downward spiral and outrage over pay to prompt action. A successful siege at a family-controlled national champion should inspire action elsewhere earlier and more often.

PPG might as well go hostile on Akzo

11 May 2017

It has little to lose by taking its $27 bln bid for the Dutch paint maker straight to shareholders. If Akzo invokes its poison pill, the deal falls away anyway. And if the U.S. suitor wins shareholder support, Akzo’s board will face enormous pressure to make the tie-up friendly.  

Shareholder battle weakens Akzo’s standalone case

9 May 2017

Activist investor Elliott is taking the Dutch paint maker to court in an attempt to oust chairman Antony Burgmans. Akzo’s defence against suitor PPG rests on its stock trading on a higher multiple after a corporate rejig. But bad governance could cancel out any upside.

Akzo board has painted itself into a corner

8 May 2017

The Dutch paint maker’s categorical rejection of rival PPG’s 24.6 bln euro bid creates two glaring problems for boss Ton Buechner. His self-imposed targets are fanciful, and many shareholders doubt his judgement on the deal. Should PPG go hostile, two battles will become three.

Dan Loeb’s Honeywell spin goes too far

5 May 2017

Hiving off the $100 bln conglomerate’s aerospace unit could boost the stock. But the activist’s argument that it would increase shareholder value by a fifth is a stretch and ignores the benefits the unit brings to Honeywell. New CEO Darius Adamczyk has other levers to pull first.

VW-Fiat Chrysler merger too tempting by half

4 May 2017

Welding together the German and the Italian-U.S. carmakers might unleash cost savings of more than $38 bln. As the auto industry gets more challenging, and Fiat Chrysler boss Sergio Marchionne more eager to sell, that prize may trump memories of previous car deals gone wrong.

Time for Siemens investors to forget troubled past

4 May 2017

For decades, the German engineering group’s poor margins and talent for botching large-scale projects justified a persistent discount to peers. Quarterly results confirm turnaround CEO Joe Kaeser has fixed both issues. If shareholders agree, Siemens could be worth 9 pct more.

Safran can wiggle out of Zodiac mess in own time

28 Apr 2017

The French engine maker clearly needs to reduce or scrap its 8.2 billion euro bid for the plane-seat maker. The current offer, a third above Zodiac’s share price, is financially and politically daft. But there’s no rush to renegotiate. Clever timing might produce a better result.

Arconic takes battle of letters to Elliott

24 Apr 2017

The parts maker offered to back two of the activist's four board picks but accused Elliott of twice reneging on agreed compromises. The exit of CEO Klaus Kleinfeld after his own intemperate screed has not relieved the tensions. Regular shareholders may by caught in the crossfire.

PPG raised offer kicks hole in Akzo’s door

24 Apr 2017

With a 50 pct premium, guarantees for European workers and a big break fee, the U.S. paint maker’s third approach for its Dutch rival leaves CEO Ton Buechner no choice but to engage. The onus would then be on PPG to explain how this rich 24.6 bln euro deal makes financial sense.

SNC-Atkins implies more risk for buyer than seller

21 Apr 2017

Canadian engineering firm SNC-Lavalin is forking out 2.1 bln pounds for UK peer WS Atkins. Given that the synergy benefits cover the premium, it looks mutually beneficial. But while Atkins gets a 42 pct cash premium, SNC’s rich cost-saving targets are less set in concrete.

Akzo’s go-it-alone plan has a rose-tinted hue

19 Apr 2017

The besieged maker of Dulux paint is wooing investors by breaking itself up and becoming more profitable. On paper, the strategy is superior to merging with U.S. rival PPG. In reality, lifting margins by a quarter until 2020, while cutting fewer jobs, looks a stretch.

Swede tissue bid justifies breakups without tears

13 Apr 2017

Forestry group SCA reportedly received an offer for the hygiene business it is about to demerge. Above $22 bln for the unit’s equity would be good. Either way, SCA has given itself options. Others faced with calls to break up, from Akzo Nobel to BHP Billiton, can take note.

Active boards needn’t fear activist investors

12 Apr 2017

Dulux paint maker Akzo Nobel wants to stymie a vote on whether its chairman should go, after he rebuffed a $24 bln bid from rival PPG. That makes it look like the company is trying to stifle debate. While activists can overplay their hand, good managers still have the advantage.

German pump maker launches farcical take-under

30 Mar 2017

Family-owned Busch is exploiting a German market quirk to bid 1.1 bln euros for peer Pfeiffer, below the current price. It may then be free to raise its stake at leisure. Oddly, Busch is offering more than it has to. Still, it’s not a great advert for German takeover rules.

Unilever can take page from GE’s activist playbook

29 Mar 2017

The 139 bln-euro Magnum ice-cream owner may attract uppity investors for the same reasons Kraft Heinz came calling: low margins and relatively little debt. CEO Paul Polman could keep them at bay by aping GE and seeking an activist's advice. But he'd have to be willing to act.

Akzo activists are useful and best ignored

29 Mar 2017

Holders of a quarter of the Dutch paint maker’s shares think it should engage with hostile bidder PPG, claims activist fund Elliott. Yet by rushing into talks, Akzo would play a trump card too early. Appearing lukewarm, but with shareholders still keen, may lure a better offer.

PPG bid for Akzo fails narrative and maths tests

24 Mar 2017

The U.S. paint and coatings maker says cost savings and the benefits of scale justify a $24 bln offer for its Dutch rival. It’s hard to tell a more visionary tale in a low-growth sector where consolidation is the way to stay ahead. But PPG’s synergy targets don’t add up either.

Hadas: The stakeholder revolution has been delayed

22 Mar 2017

Robust takeover rebuttals by Unilever and Akzo Nobel suggest that explicitly ethical stakeholder capitalism can overturn the idol of short-term shareholder value. That mostly makes economic sense. But the pressure for quick financial results is increasing. Compromise, please.

Akzo shareholders, beware the double-Dutch defence

22 Mar 2017

The maker of Dulux paint says a sweetened $24 bln approach by U.S. rival PPG is bad not just for shareholders but the community, customers and employees. It’s hard for a suitor to counter those claims. If such defences become the norm, expect fewer takeovers and lower valuations.