Industrials

GE split should start with insurance black box

17 Nov 2021

Its $38 bln of old-age care policies – historically the source of some nasty surprises – will be lumped with the jet-engine division when the conglomerate breaks into three. Covid-19 may have made those policies less of a liability. That’s all the more reason to cut them loose.

Thyssenkrupp finds lost hydrogen lottery ticket

17 Nov 2021

The ailing 7 bln euro German group’s shares soared amid hopes it might list its electrolysis unit. With a few tweaks, its chlorine-making kit can produce hydrogen, a big enabler of a no-carbon world. That promise means its paltry current sales could yield a 5 bln euro jackpot.

Viewsroom: GE goes for breakup; COP not out yet

11 Nov 2021

Though Larry Culp’s move to separate the U.S. industrial conglomerate into three parts marks the end of an era, the decision was inevitable, John Foley argues. And the UN climate do kicks off its second week with one step backward. George Hay and Rob Cox check in from Glasgow.

GE breakup is common sense, at least in theory

9 Nov 2021

Carving up the $120 bln conglomerate is no longer the drastic step it would have seemed under CEO Larry Culp’s predecessors. After Culp’s cleanup, three separate, more focused businesses could be worth more. But financial engineering often disappoints – especially at GE.

Wind turbine makers are victims of own success

3 Nov 2021

Soaring demand for renewable energy has inflated Vestas and Siemens Gamesa into multibillion-dollar firms. Yet the pair are struggling to turn a profit because of steep rises in raw materials costs. Passing those on will end wind power’s long-term trend of falling prices.

Higher gas prices are a long-term corporate thorn

13 Oct 2021

It’s tempting to dismiss soaring values of the fossil fuel as another temporary spike. But prices will stay elevated in the short term, while supply may keep falling short of demand in the longer run too. Sensible businesses should plan for higher energy bills.

Acquisitive Swedes may turn into overseas turnips

7 Oct 2021

Serial acquirer Storskogen has listed in Stockholm and is worth $8 bln. It makes its money hoovering up cheap, small companies from jewellery suppliers to trailer manufacturers. But rapid overseas expansion beyond its home territory will bring fresh risks, and more competition.

India’s promoter capitalism gets a timely bashing

6 Oct 2021

Shareholders are stirring up resistance at Mukesh Ambani’s Reliance, broadcaster Zee and lender PNB. Some of the uprisings will be quelled, but they underscore a welcome shift toward more investor-friendly forces. It’s an overdue development just as interest in the market surges.

DSM rejig needs stronger growth flavour

14 Sep 2021

The 31 bln euro food ingredients maker is looking to sell its industrial materials unit. It’s an overdue step that will give the shares only a modest bump. If the Dutch group can grow its sales more quickly, a Givaudan-style valuation and sweeter gains could follow.

The Exchange: Good chemistry

10 Aug 2021

Jean-Marc Gilson, the first foreigner to run industrial giant Mitsubishi Chemical, is streamlining a conglomerate with fingers in everything from pharma to batteries. He talks with Pete Sweeney about clean energy, better governance and how outsiders fit into Japan Inc.

GE chief accepts the things he cannot change

27 Jul 2021

Larry Culp’s monomaniacal quest to make his $120 bln conglomerate “lean” is paying off. GE’s cash flows are improving. But Culp can’t do anything about shifting tides of customers’ behavior. Investing in GE also requires getting comfortable with the things Culp can’t control.

ABB offers lesson in virtue of simplicity

26 Jul 2021

The $75 bln Swiss industrials giant is selling a power transmission unit to RBC Bearings for $2.9 bln. The rich price vindicates CEO Bjorn Rosengren’s plan to slim down and focus on electrification and robots. That will likely cement a premium valuation versus rival Siemens.

Capital Calls: Intel, SPAC lobby

16 Jul 2021

Concise views on global finance: Buying GlobalFoundries would boost Intel’s ambitions to make chips for other firms, but spinning it off afterward might please investors more; a new D.C. group sets up shop to defend the blank-check craze.

Capital Calls: Online fashion retail

15 Jul 2021

Concise views on global finance: The return of old customer habits and muted demand as the pandemic lingers could reverse the recent stellar run of the likes of ASOS.

UK engineer finds limits of responsible capitalism

7 Jul 2021

Renishaw’s octogenarian founders have removed the “for sale” sign for the $5 bln group after buyers balked at pledges on jobs and R&D. The stance may be hard to sustain when they retire. Alternatives, like selling a stake to a trust or the state, may not ensure a rosy future.

Capital Calls: JEDI’s demise, Toyota’s weird world

6 Jul 2021

Concise views on global finance: The cancelation of a $10 bln U.S. government cloud contract shows negotiating big projects is sometimes a matter of guesswork. Meanwhile, the auto firm that pioneered just-in-time manufacturing is cashing in on a chip stockpile and red-hot market.

Pricey Finland pulp deal offers paper-thin returns

2 Jul 2021

Shares in 5 bln euro Finnish engineer Valmet fell after it agreed an all-share takeover of valve maker Neles. Although both operate in paper, the modest cost savings on offer suggest CEO Pasi Laine may struggle to generate decent returns. Investors are right to be sceptical.

Capital Calls: U.S. jobs, Didi probe, Pharma LBO

2 Jul 2021

Concise views on global finance: The U.S. added 850,000 jobs in June but the recovery isn't happening everywhere. Meanwhile, Didi is hit with an investigation by a Chinese regulator days after its U.S. listing, and a pharma buyout by EQT and Goldman is a game of hot potato.

Capital Calls: It sure feels good to be a banker

1 Jul 2021

Concise views on global finance: Global deals in the first half of the year broke all records.

CNH pays hefty price for driverless tractor ride

21 Jun 2021

The Italian-American agricultural equipment group is paying $2.1 bln for Raven Industries, which makes tech for autonomous farm machines. With few cost savings, the multiple of almost 40 times EBITDA looks rich. CNH will need a big sales boost to harvest a decent return.