Industrials

French M&A: a guide for foreign buyers

24 Apr 2014

Deals for Publicis and Lafarge belie the sneers that France is closed to outsiders. If GE really wants to buy all of Alstom, it needs to be sensitive to local politics. Save some top roles for the French side. Maybe even rename the enlarged, “Paris-based” group Alstom-Electric.

GE/Alstom deal rumours test French reform drive

24 Apr 2014

Shares in the Paris-based engineer jumped 14 pct on reports it has received a bid. Alstom vaguely denied the story. But mere talk about a sale to the U.S. conglomerate will embarrass the French government just as its business-friendly reforms are proving a hard sell domestically.

Lafarge and Holcim should get selling

10 Apr 2014

Investors worry the cement groups’ $50 bln merger will destroy value, with rushed disposals to win antitrust clearance. But if the Franco-Swiss duo has found the right assets to sell, and the synergies stack up, it’s worth swallowing some losses to get on with the integration.

Lafarge-Holcim share jump has gone far enough

7 Apr 2014

The planned $50 bln merger of the French and Swiss cement groups has added a combined $5 billion to their market capitalisations. Credible synergies could be worth much more. But uncertainty over completion and the risk of value-destructive forced disposals justify scepticism.

Rob Cox: GE should put itself up for sale

1 Apr 2014

April Fools’ Day joke? Nope. It’s a shareholder proposal on the ballot at GE’s annual meeting. Setting aside the absence of buyers for a $260 bln company, it illustrates the kind of shareholder democracy gone wild that many boards and an SEC commissioner would like to squelch.

Rival’s split makes it harder for Dow to resist

10 Mar 2014

FMC, a $10 bln pesticide-to-battery-parts maker, is splitting its fast-growing ag and pharma businesses from stodgier commodity minerals. It’s similar to the breakup activist Dan Loeb wants at Dow Chemical. Boss Andrew Liveris is standing firm. FMC’s move weakens his case.

Elon Musk’s Gigafactory puts utilities on notice

6 Mar 2014

The Tesla CEO reckons he can kick off a virtuous circle by doubling world lithium-ion battery production. Musk expects that to slash costs by more than 30 pct and add a turbo boost to Tesla’s sales. It may also leave electric pylons looking as outdated as telephone poles.

Big Consumer struggling to manufacture growth

21 Feb 2014

The industry’s annual U.S. confab is chock-a-block with whiz-bang products like Bluetooth-enabled toothbrushes and funnel-cake corn dogs. But it’s just empty calories if it doesn’t lead to robust top lines. Cost-cutting alone can’t justify today’s expensive share-price multiples.

Conti takes smart road west in $2 bln Veyance deal

11 Feb 2014

The German automotive group is buying the U.S. rubber and plastics firm from private-equity owner Carlyle. Investors may be disappointed Conti is doing M&A rather than returning cash. But the price looks undemanding and there’s strategic logic in diversifying away from Europe.

Dan Loeb puts the right accelerant in Dow Chemical

21 Jan 2014

The activist investor wants the company to hive off its petrochemicals unit, a more aggressive move than CEO Andrew Liveris has hinted at. Loeb’s analysis looks optimistic, but a sum-of-the-parts analysis suggests merely breaking up Dow could boost its value by a fifth.

U.S. employers will bring more jobs back home

26 Dec 2013

The nation’s energy costs and wage growth are lower than in many other countries. Productivity’s higher, too. Not only does it make outsourcing to the likes of China less appealing. It may also herald a renaissance for American manufacturing.

Review: Dissecting America’s manufacturing retreat

1 Nov 2013

“Made in the USA” challenges the idea that U.S. industrial decline was inevitable or desirable. Canadian academic Vaclav Smil blames bad choices, not just changing economic tides. But his argument for better industrial policy veers dangerously towards protectionism.

High-tech glass maker finds smashing way to grow

23 Oct 2013

Corning’s taking full control of its Korean LCD display unit from Samsung and other minorities. Samsung gets a chunk of the Gorilla Glass maker and a long-term partner to produce needed high-tech materials. And Corning strengthens its position against its rivals on the cheap.

Kochs follow Buffett in takeovers, if not politics

9 Sep 2013

The conservative Koch brothers have taken a leaf from the more liberal Sage of Omaha in their $7.2 bln purchase of Molex. The family firm will be run as a separate unit, retaining existing management. Buffett’s favorite banker, Byron Trott, even appeared at the negotiating table.

Industrialist hat suits Bill Ackman better

27 Aug 2013

Retailing clearly isn’t his thing. A big bet on $22 bln Air Products, however, is the uppity investor’s second effort in heavier production after Canadian Pacific. As at the railway, better management could go a long way. A lot has to go right, though, to replicate that success.

China’s next reform: more central planning

26 Jul 2013

The central government wants to cut excess capacity in basic industries by telling 1,400 companies to shut factories. It has to overcome the free-market instincts of local governments and entrepreneurs. But if the plan works, China will be more efficient - and less polluted.

Improving margins will be leaner Siemens’ real test

10 Jul 2013

The German industrial group pleased investors by hiving off two underperforming units. Getting rid of Nokia Siemens Networks and Osram are indeed milestones in refocusing the company. Improving the profitability of the remaining core business remains a bigger challenge.

ThyssenKrupp’s pride well worth 1 billion euros

1 Jul 2013

That’s how much new capital the German steelmaker may need. The RAG foundation, a local rival to the one that controls Thyssen, seems willing to buy a stake. While hurting vanities, this would be an elegant fix to the company’s woes. Pride is a luxury Thyssen can’t afford.

Cinven goes weak at the knees for Rockwood unit

17 Jun 2013

The private equity firm is paying a hefty $2 bln for Rockwood’s CeramTec unit. But at least this is a corporate selloff, rather than yet another “secondary” deal between two PE houses. And there is sound demographic logic in buying one of the leaders in artificial joints.

GE Capital chief exit puts spotlight on Immelt

30 May 2013

Michael Neal may be leaving after eight years running the erstwhile high-flying lending unit. He got GE Capital back in shape after the financial crisis, but it’s no longer the company’s key division. Neal’s departure raises the question of who will succeed GE boss Jeff Immelt.