Mergers & Acquisitions

JPMorgan faces tangle in cable M&A

9 Dec 2011

The U.S. bank agreed to be a backstop buyer if Liberty Global’s takeover of Germany’s KabelBW is blocked. But JPM wouldn’t find it hard to sell KabelBW on, and it shouldn’t lose money. A clean execution of the JPM plan B could be a boost for devices neutralising regulatory risk.

Latin America gets closer even as Europe cracks

8 Dec 2011

Cross-border deals among South American companies, like Chilean CorpBanca’s purchase of Santander Colombia, set a new record in 2011. A single Latin currency seems remote given the euro’s woes. But as the region’s private sector consolidates, it can’t be ruled out for ever.

Spanish banking sector to pay for its sins

8 Dec 2011

Banco Sabadell is taking troubled lender CAM off Madrid’s hands, and Spain’s bank-backed deposit guarantee fund is helping by making a big capital injection. Such deals minimise the cost to the taxpayer, but aren’t a free lunch for the state and won’t solve the sector’s problems.

Clock is ticking on Veolia’s efforts at renewal

6 Dec 2011

The French utility has been hit hard by the economy and its own hubris. Chairman Antoine Frerot is trying to regain the initiative by selling 5 bln euros of assets and widening cost cuts. That’s sensible, but he needs results fast. Investors’ patience must be wearing thin.

Oracle needs to read Cisco cautionary tale

5 Dec 2011

Empires built on acquisitions can run into problems as they sprawl. That’s doubly so in tech, where obsolescence is a risk. Oracle has used database profits to buy new businesses. So far, so good - but Cisco’s record suggests success will be hard to sustain.

SAP pays $3.4bln to ride rise of "cloud" computing

5 Dec 2011

The German software giant is swallowing a fast-growing yet barely profitable upstart, Successfactors. The price is a lofty 8 times sales but SAP needed a deal. It risked missing out on a huge shift by corporate clients to cloud-based technology applications.

New England power merger deserves final nixing

5 Dec 2011

A report on Northeast Utilities’ handling of a snowstorm from a former U.S. disaster official makes it clear: the company failed in the duties that come with its monopoly. Regulators have all the evidence they need to power down the utility’s $4.7 bln takeover of rival NSTAR.

Piecemeal solution would suit bust Spanish caja

2 Dec 2011

Sabadell was the only bank that made an offer for CAM, after other bidders backed out. Now Spain’s central bank must decide whether it sells the caja with all sorts of expensive guarantees. Alternatively, it could sell the good parts. This option may be the least painful.

Thomson finally completes takeover of Reuters

2 Dec 2011

Tom Glocer’s bankerly CEO skills no longer suit the publishing giant. He restructured Reuters and deftly engineered its well-timed sale. But the company needs to grow – and the controlling Thomson family is weary of waiting. How it does so, though, still seems far from clear.

AT&T boss should pay price if T-Mobile deal fails

28 Nov 2011

The telecom giant bet big it could get the $39 bln acquisition past regulators. Now, AT&T is acknowledging how tough the fight is. It’s looking more likely shareholders will be on the hook for $6 bln. If so, CEO Randall Stephenson should lose some comp - and his chairman’s seat.

M&A gives no reprieve for China’s global lawyers

25 Nov 2011

Mallesons of Australia plans to merge with King & Wood, a Chinese rival. It sounds harmonious, but won’t do much to change the fact that foreign counsels get short shrift in the People’s Republic. When the WTO let China in, it largely forgot lawyers. Their prospects look bleak.

AT&T’s $4 bln admission: DT deal may be a turkey

24 Nov 2011

Happy Thanksgiving from the U.S. telco. It has acknowledged its $39 bln T-Mobile takeover may flop, taking a charge worth 10 pct of the deal to cover a record break fee. Failure would also deprive AT&T of synergies, Deutsche Tel of an exit and investment banks of a rare payday.

Swiss private bank stress forcing consolidation

24 Nov 2011

The strong Swiss franc, tax deals and market turmoil are squeezing the industry. That’s prompted Dutch lender Rabobank to weigh bids for its 46 pct stake in Sarasin. Any buyer risks culture clash and customer loss. But the benefits of size may outweigh those of independence.

KKR’s $7.2 bln Samson deal looks more BO than LBO

23 Nov 2011

The private equity firm and its partners are putting more than 50 pct equity down to buy the Oklahoma energy firm. That surely reflects more than Henry Kravis’ desire to bet on a hometown play. Banks are understandably nervous about lending against the promise of wildcat riches.

Investors too skeptical on Gilead’s $11 bln bet

21 Nov 2011

Helped by acquisitions, the biotech made it big with drugs for HIV. Now, by buying Pharmasset, it’s trying the same trick with hepatitis C. Sure, Gilead is paying a stonking 89 pct premium. But wiping some $3 bln off the buyer’s market value looks like an over-reaction.

Exclusive: Ditching CEO won’t save US utility deal

18 Nov 2011

Northeast Utilities parted ways with the head of its biggest division, CL&P, after the utility’s bungled storm response. Investors think that makes the pending $4.7 bln takeover of NSTAR more likely. Not so fast: Connecticut plans to reopen the merger review by hook or by crook.

Northern Rock sale barely dents UK bailout tab

17 Nov 2011

Selling the good part of the collapsed UK lender to Virgin Money raises up to 1 billion pounds for the government. But the proceeds are small beer compared to the 21 billion pounds the state has lent to Rock’s bad bank. Fully reimbursing taxpayers will take well over a decade.

Gulf airlines can afford a little arrogance

16 Nov 2011

Qatar Airways’ CEO gave Airbus a lecture on strategy before placing a $6 bln order, just after rival Emirates did an $18 bln deal with Boeing. It may sound like hubris. But it’s not hard to see how investment could become market share in a recovering world.

Buffett’s IBM has rare mix of growth and value

15 Nov 2011

Berkshire Hathaway’s investment success is built on common sense stock picks such as the tech-turned-consultancy firm. But only four other global large-cap stocks match Big Blue’s downhome growth-and-value qualities of a sort so admired by the Sage of Omaha.

IBM bet doesn’t mean Buffett’s tech spots changed

14 Nov 2011

The Oracle famously avoids tech stocks but bought a $10.7 bln stake in Big Blue. Once at the cutting edge of supercomputers, IBM just pulled out of a next-generation project. It’s now a predictable, well-branded consulting firm. IBM’s investment profile evolved, not Buffett’s.