Industrials

Piech exit only small step to VW governance revamp

20 Mar 2017

The 79-year-old patriarch may sell his stake in the carmaker to younger family members. The next generation should be keener on shareholder value than empire building. But while Ferdinand Piech’s vanity will be history, VW’s bigger burden - flawed governance - remains intact.

Renault’s main risk is Ghosn exit – not emissions

16 Mar 2017

The carmaker’s shares lurched on reports of French authorities’ allegations of emissions cheating. Unless Renault’s protestations of innocence are bogus, the concerns look overblown. A far bigger problem for the group would come if boss Carlos Ghosn were to be shunted aside.

PPG will struggle to paint by Akzo Nobel numbers

15 Mar 2017

A $22 bln proposal to mix the makers of Glidden and Dulux pigments was rejected by the Dutch target. To make a sweetened bid deliver even a reasonable return, PPG will have to apply ultra-glossy cost savings. For shareholders, the outcome would more likely be corrosive.

Star-crossed Zodiac deal works at half the price

15 Mar 2017

Engine maker Safran’s 8.2 billion euro offer for its plane-seat making compatriot looks a bit sick after Zodiac popped out a profit warning. It’s a chance for the buyer to renegotiate a poor deal. But the value at which it would make sense is far, far lower.

Sleepy German investors get Bosnian alarm call

15 Mar 2017

An activist investor owning just 20 pct of auto supplier Grammer may win de facto control over the 626 mln euro company without paying a premium. The reason isn’t a kink in German rules, but the complacency of shareholders who rarely show up to annual meetings.

Akzo’s coating against $22 bln bid looks thin

9 Mar 2017

The Dutch maker of Dulux paint has rejected a cash and shares offer by U.S. rival PPG, and may detach its specialty chemicals unit instead. It’s good that Akzo Nobel has presented a swift alternative plan. It’s just unlikely to be as valuable as the one the company just rebuffed.

HK gas spat should squeeze more from Air Products

1 Mar 2017

A buyout firm has upset the U.S. group's pursuit of Hong Kong-listed Yingde Gases with a rival $1.5 bln proposal. Investors think the intervention could force a higher proposal out of Air Products. That would be a victory for outside shareholders after a rocky few months.

Korea fraud electrifies case for ABB spinoff

22 Feb 2017

The Swiss group suspects its South Korean treasurer helped steal $100 million. Fraud equivalent to a fifth of 2015 local sales was only uncovered after the executive absconded. This plays into the hands of activist investors who wanted ABB to become less complex.

Peugeot-Opel merger faces winding road to riches

14 Feb 2017

The French carmaker is in talks to buy GM's ailing European business. If the union delivers cost savings similar to those achieved by Renault and Nissan, the value created would match Peugeot's 15 bln euro market cap. But finance, management and politics are formidable obstacles.

Investors can hitch a ride on Renault’s recovery

10 Feb 2017

After last year's record sales and profit growth, the French carmaker has pledged to lift margins close to the levels enjoyed by premium rivals by 2022. Even if CEO Carlos Ghosn is being overly optimistic, Renault's lacklustre valuation looks increasingly hard to justify.

New captain can steer Maersk into calmer waters

8 Feb 2017

The ailing Danish shipping and oil conglomerate reported disappointing fourth-quarter results, halved its dividend and replaced its chairman. Yet a rising oil price, recovering freight rates and Maersk’s coming split mean former SAP boss Jim Snabe is boarding at a turning point.

Siemens beats activist investors at their own game

1 Feb 2017

Boss Joe Kaeser has carved out businesses, cut red tape and lifted payouts, all without outside pressure from militant shareholders. The group's impressive quarterly results and a better 2017 outlook vindicate the approach. Yet valuations have yet to reflect his success.

Atkins $4 bln merger would be fragile construction

30 Jan 2017

A mooted tie-up between the UK engineering consultancy and unlisted U.S. peer CH2M has some logic, ahead of a likely rise in infrastructure spending. Yet WS Atkins shareholders will need some persuading. CH2M's lackluster performance would make its value a bone of contention.

German pump bid lacks investor pressure

24 Jan 2017

Family-owned Busch has offered to buy the 73 pct of Pfeiffer Vacuum it doesn’t already own, valuing its rival at $1 bln. Paying a 12 pct premium to the three-month average share price is too stingy. Pfeiffer’s improving profitability and potential synergies merit a higher price.

Philips’ heart failure is a buying opportunity

24 Jan 2017

The Dutch medical kit maker says the U.S. is probing its defibrillators. While the business pulls in just 1 pct of revenue, the setback follows problems in medical imaging and the sale of specialty LEDs. Still, if Philips can exit its lighting unit briskly the shares look cheap.

UK industrial strategy needs to go big or go home

23 Jan 2017

Theresa May is right to try and revive Britain's industry - not least because its financial services cash cow is en route to the slaughterhouse. Infrastructure, exchange rates and regional stimulus would be helpful priorities. Otherwise the squeakiest wheels may get the grease.

Foxconn’s $7 bln U.S. bet goes beyond politics

23 Jan 2017

Building a huge American factory would fit neatly with President Trump's push to create domestic jobs. That could help the Taiwanese iPhone maker navigate trade disputes. Grabbing a share of the U.S. television market could also help revive recently acquired subsidiary Sharp.

Safran tries too hard to please Zodiac insiders

19 Jan 2017

The French group’s $10 bln offer for the plane-parts maker only flies if most shareholders take cash, leaving shares for Zodiac’s controlling families. There’s a wrinkle: the strategic logic, and Safran’s superior performance, make the stock alternative appealing to others too.

Rolls-Royce finally emerges from dark clouds

17 Jan 2017

The UK engine maker is finally taking off. Rolls is more upbeat about its 2016 profit and cash generation, the first positive surprise in a while. And a 671 pound settlement for bribery charges is costly yet manageable. Encouraging signs that boss Warren East is getting a grip.

VW saved by its own failures in the U.S.

11 Jan 2017

The $4.3 bln settlement of criminal charges lifts the carmaker's Dieselgate costs to above $24 bln. VW can cope, but only thanks to its chronic underperformance in the U.S. Had the group met its U.S. targets up to 2015, it would be facing a crushing bill three times that size.