Mergers & Acquisitions

Icahn on Icahn: a Q-and-A with an investing icon

27 Mar 2012

For over four decades, he has been needling companies like no one else. After Breakingviews needled him, he offered his own views in his own words. Golfing CEOs, the “totalitarian state” of corporate America and Alexander the Great were all part of the conversation.

Diamonds are simply too small for Rio and BHP

27 Mar 2012

While Anglo America has just dropped $5.1 bln bulking up in diamonds, Rio Tinto and BHP Billiton are running for the exits. The industry is just too small for the biggest miners, despite solid fundamentals. That clears the way for niche players or even private-equity firms.

Monopolies thrive when politicians go short-term

26 Mar 2012

How else to explain the likely approval of a $17.5 bln New England power merger? Northeast Utilities’ incompetence is proven, but dangling a few politically expedient goodies seems to have won authorities over to its NSTAR takeover. Captive customers may lose, but investors win.

Watchdogs could change Vivendi’s EMI tune

23 Mar 2012

The French group’s Universal music arm feels so good about its chances of success that it agreed to pay the full $1.9 bln price even if trustbusters block the deal. But it’s actually a third possibility - being forced to sell pieces - that could be the costliest for Universal.

Glencore tiptoes onto the Canadian prairies

20 Mar 2012

The commodity trader has roped in two local partners for its $6.1 billion purchase of Viterra, the Canadian grain firm. That setup nearly halves its outlay and takes out some unwanted businesses. It also reduces the risk of a BHP-style political backlash.

Amazon hedges against the rise of the machines

20 Mar 2012

That’s one way to explain the kooky $775 mln purchase of Kiva. Either that or Jeff Bezos has a robot fetish. It’s not clear what the deal offers shareholders. Automating Amazon’s warehouses makes sense. Buying Kiva droids, rather than their maker, seems the more rational approach.

Activists land rare European win with TNT

19 Mar 2012

The Dutch courier’s $6.8 bln sale to UPS is a rare victory for activist investors after a lean patch in Europe. They are likely to score again with the $2 bln buyout of Britain’s Misys. Corporate stragglers: beware. Results like these will embolden troublemakers.

Cisco’s John Chambers falls off the M&A wagon

15 Mar 2012

Less than a year ago, the networking giant’s boss, in an unusual mea culpa, forswore big deals and promised discipline. Now, he’s shelling out $5 bln for NDS, a pay TV software firm. But this acquisition might deliver justifiable returns and fit nicely with Cisco’s strategy.

U.S. dealmakers should beware trustbusters abroad

15 Mar 2012

Bankers are oozing optimism about cross-border M&A. But as Western Digital’s recent $4.8 bln takeover of Hitachi GST shows, antitrust watchdogs around the world are proceeding cautiously and baring their teeth. Other globetrotting buyers like UPS will need to pack some patience.

Asset grab a new twist in platinum’s tale of woe

15 Mar 2012

Impala Platinum’s cave-in over control of a Zimbabwe mine is bad news for an already-struggling industry. Labour strife, deadly mines and spiralling costs make it hard for producers to earn reasonable returns on the white metal, despite high prices and an effective oligopoly.

Greek banks face six month battle for survival

14 Mar 2012

The merger of Alpha and Eurobank EFG has collapsed, deepening the capital hole at Greece’s four big lenders. If they can each fill a chunk of their deficits privately by September, shareholders could yet escape total nationalisation. But it won’t be easy to attract new investors.

Youku-Tudou price pop not only about synergies

14 Mar 2012

The Chinese video portals’ combined market value swelled by $1.5 billion after they unveiled a merger. Cost savings of $50 million a year only partly explain it. Other factors may include a squeeze on short sellers, and hopes that an enlarged Youku could itself be a bid target.

Citi, time to hand Smith Barney to Morgan Stanley

13 Mar 2012

The firm led by James Gorman should get Fed approval this week to buy another 14 pct of the stockbroker it owns with Citi. But acquiring it all would make more sense and unlock capital for Citi. Assuming they can agree on price, of course - and convince regulators of the plan.

Splitting AT&T CEO and chairman roles a no-brainer

13 Mar 2012

Randall Stephenson’s botched plan to buy T-Mobile USA came with a $4 bln tab. The board didn’t see fit to hold him accountable with his pay package. But shareholders can have their own say - and should vote to strip Stephenson of his chairman title and install an independent.

Glencore faces fight to land $5.5 bln Viterra deal

12 Mar 2012

Buying Canada’s biggest grain handler would round out the commodity trader’s growing agricultural portfolio. The assets are attractive and the timing is right. But rival bidders, a lack of obvious synergies and Canada’s penchant for resource nationalism may present obstacles.

Merger of China’s YouTubes shows web maturity

12 Mar 2012

The $3 bln tie-up of China’s two pure-play online video groups looks like a defensive move in the country’s fiercely competitive Internet market. Diversified players like Baidu and Sina are investing in their own video portals. Profits are coming – but only for those with scale.

Abu Dhabi tries merger to end property mess

12 Mar 2012

The emirate wants to marry its top-two listed developers in a bid to end the misery at Aldar, which has already sucked up $10 bln in bailout funds. But Abu Dhabi will have to work hard to protect prospective partner Sorouh’s independent majority shareholders.

M&A lawyers lob stones at Goldman from glass house

9 Mar 2012

At the dealmaker jamboree in New Orleans, debate over how the bank played both sides of the El Paso sale drowned out other hot topics. Bankers and CEOs took beatings over other conflicts, too. And yet for an event mainly devoted to legal issues, there was little self-reflection.

New-look LSE enhanced by LCH grab

9 Mar 2012

The bourse operator’s push into stronger businesses like “post-trade” services continues with the takeover of clearer LCH.Clearnet. Taking no more than 60 pct keeps customers onside. The complex deal also looks financially respectable. Hence a bounce in LSE stock.

U.S. energy nationalism soft spot could be gas

8 Mar 2012

Seven years after jingoism prevented CNOOC from buying Unocal, Chinese companies remain on the prowl. So far, they have been content with joint ventures. And high oil prices would make acquisitions difficult now anyway. But foreign buyers may find America less protective of gas.