Industrials

Alstom chase is distraction from Siemens revamp

7 May 2014

The German engineering giant’s long-awaited new strategy sensibly focuses on improving efficiency and cutting slack. A possible Alstom deal comes at a bad time, even though the French rival would be a good industrial fit. Siemens management has enough to deal with in-house. 

Applus better play it safe with IPO pricing

6 May 2014

The Spanish industrial testing company plans to raise 1.1 billion euros. The sector’s track record is impressive and Applus is growing faster than rivals. But it’s less diversified, and will still be saddled with debt. As such, it deserves a discount. 

Alstom’s train future is with Siemens, not GE

6 May 2014

Paris opposes an offer by the U.S. group to buy Alstom’s power business unless the French company gets the American’s transport assets in exchange. That is a barmy idea. What Alstom should try instead is use GE’s money to build a pan-European train business with Siemens. 

GE in hard-to-beat 11.4 bln euro bid for Alstom

30 Apr 2014

The U.S. conglomerate’s offer for the French group’s power assets is at the upper end of a reasonable price range. Germany’s Siemens will find it hard to improve on a fair offer favoured by Alstom’s board - and it would probably bring less cash to the table.

Siemens’ Alstom proposal attractive but risky

28 Apr 2014

The German engineer has offered to swap assets with its French rival after a possible GE/Alstom deal ran into government opposition. Exchanging trains for turbines could create two strong players, and generate larger synergies. But antitrust obstacles may be tough to overcome.

Alstom split would energise business units

25 Apr 2014

Too much debt, a ropey rating and looming refinancing needs are Alstom’s key problems. The French engineering group would need more time to fix them than its shareholders seem to allow. A split would make sense, and GE can help.

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.