Industrials

Taiwan, Korea don’t tell cheery U.S. growth story

18 May 2015

Employment growth is sputtering in the two Asian exporting nations most exposed to American consumers. History suggests that’s a bad omen for U.S. retail sales. If the pattern holds, a bad winter in the world’s biggest economy could be followed by a disappointing summer.

Monsanto heaps pressure on Syngenta

8 May 2015

The U.S. seeds giant has made a $45 bln approach to the Swiss pesticide firm. The target rejected this as too cheap and too risky. Syngenta has a point: there will be major political and antitrust hurdles. But it needs to lay out just how it will create more value on its own.

Slow Siemens is stretching investors’ patience

7 May 2015

Reinventing the lacklustre engineer is taking a long time. Siemens’ industrial profit fell by 5 pct to 1.7 bln euros in its second quarter. CEO Joe Kaeser is stepping up cost-cutting by slashing another 4,500 jobs. But it looks like 2015 may be another lost year. 

Well-oiled performance shows VW on right track

29 Apr 2015

Volkswagen had a better-than-expected first quarter. Operating profit rose 16 pct to 3.3 bln euros. Trading woes cannot explain the boardroom battle launched and lost by ex-Chairman Ferdinand Piech. If VW modernises its governance and keeps delivering cost cuts, shares may motor.

Roaring Daimler can rival BMW in investor rewards

28 Apr 2015

The Mercedes maker recorded its best ever quarter for sales and operating profit. With profit margins rising and a cash pile of 20 bln euros, it’s time to re-engineer the payout policy. BMW, which is mulling a special dividend in 2016, can again serve as a role model.

VW’s best strategic options may be the simple ones

27 Apr 2015

Ferdinand Piech’s exit gives Volkswagen room to rethink. Europe’s largest carmaker can ditch the former chairman’s more grandiose growth visions. It can create ample additional value by shunning M&A and focussing on existing strengths, cost control and cash generation. 

Europe’s top activist gets bogged down in Germany

23 Apr 2015

Cevian takes a longer-term, lower-key approach than U.S. rivals. But it’s found a particularly knotty problem at Bilfinger. The industrial group has seen five profit warnings and a 45 pct stock decline over the last year. A good exit is conceivable, but not straightforward.

Volvo turnaround will be helped by heavy-duty hire

22 Apr 2015

The Swedish truckmaker poached Martin Lundstedt from Scania, its stronger VW-owned rival. The new CEO and good results sent shares soaring. Volvo is already excavating itself out of a hole - but Lundstedt could speed up the recovery by getting out of diggers and bulldozers.

GE Capital sale may be zero-sum TBTF game

21 Apr 2015

Shrinking the finance unit should allow GE to ditch its systemically worrisome tag. One possibility is Wells Fargo buying $83 bln of the assets, in deals that would surpass the comfort level of regulators for most bank M&A so far. And it would make one mega-bank even more mega.

Cable giant takes new tack in Belgian telecoms

20 Apr 2015

Liberty Global’s Telenet arm is buying KPN’s unit in Belgium for 1.33 bln euros. Paying eight times 2015 EBITDA for BASE looks good value for the buyer given the scope for savings. Moving into owning mobile assets is also an important shift for John Malone’s group.

GE’s higher sum may reflect most of the parts

17 Apr 2015

With the financial arm being jettisoned, the focus starting with Friday’s Q1 results is squarely on the industrial businesses. Valuing the pieces similarly to rivals, $276 bln GE carries a smaller but conspicuous conglomerate discount. Don’t expect it to shrink much more.

Europe’s car spring can turbo-charge auto stocks

14 Apr 2015

The speed with which new car sales have accelerated this year has surprised even optimists. Pent-up demand, a stabilising economy and low interest rates are all helping. Shares in VW, Fiat, Renault and others have already rallied. But sentiment was so glum there’s further to go. 

Wall Street bids slow farewell to GE fee darling

13 Apr 2015

The U.S. conglomerate has been the best corporate client for investment bankers since 2000, spending some $5.1 bln for assistance. Shrinking GE Capital will keep M&A dealmakers happy. The unit’s borrowing, however, is the biggest moneymaker. Much of that could now be at risk.

Volkswagen weakened by chairman’s grumbling

13 Apr 2015

Ferdinand Piech has distanced himself from his successor-in-waiting, CEO Martin Winterkorn. This weakens Europe’s largest carmaker in the midst of a big cost-cutting effort. It also exposes flaws in VW’s governance and divisions in the controlling Porsche family.

GE finally exorcises Jack Welch’s financial demons

10 Apr 2015

It took a near-death experience and flat-lined shares, but Jeff Immelt is ditching banking and returning GE to its industrial roots. The timing works on many levels: asset values are high and lending businesses can be funded. Immelt also keeps a step ahead of prowling activists.

Immelt’s SIFI escape route is tough to follow

10 Apr 2015

The $280 bln GE is offloading most of its finance unit and should be able to ditch the systemic tag imposed by watchdogs. That will free CEO Jeff Immelt’s remaining empire from onerous rules. Big U.S. banks might fancy similar liberty, but they are more tightly hemmed in.

GE shows way by ending wait for tax Godot

10 Apr 2015

The U.S. conglomerate is bringing home $36 bln and will pay $6 bln in taxes on it. The move helps GE deliver a capital return plan with sufficient heft to make a mark. It also should be big enough to be noticed by other companies paying a price for leaving some $2 trln overseas.

France becomes Renault activist – to stop activism

8 Apr 2015

The state is temporarily hiking its stake in the carmaker to prevent other investors opting out from a law to double government voting rights. The reform is meant to protect long-term investors. As it is, Paris is using activist-style techniques to safeguard its own interests.

Dow Chemical tempts fate with $5 bln chlorine sale

27 Mar 2015

The company is offloading its bleach and vinyl-related chemicals to smaller rival Olin using the esoteric reverse Morris Trust structure. The valuation looks solid, especially considering the tax savings. Yet investors should remain wary given the history of such complex deals.

China may finally end Pirelli’s stock market spins

20 Mar 2015

State-owned China National Chemical is buying into the listed tyremaker, run by Marco Tronchetti Provera. It’s the third big capital shift since 2013, each with control moving through a complex web of holding firms. But this one could be the last, if it leads to a full buyout.