Roads & Transportation

Rail mega-deal holds ticket to runaway M&A train

29 Dec 2015

Canadian Pacific’s $28 bln bid for Norfolk Southern involves an industrial buyer facing low growth and an aggressive investor. The offer is unsolicited, cross-border and legally messy. After a record year of mergers, this one transaction foretells much of what to expect in 2016.

Contortions make rail deal tough sell for Ackman

8 Dec 2015

A revised offer from Canadian Pacific for Norfolk Southern, together worth nearly $50 bln, included an interim trust, less cash and finger-in-the-air merger math. The activist contributed 23 pages of slides. NS was too quick to rebuff it. Investors, though, may just be confused.

Container shipping deal stacks up in multiple ways

7 Dec 2015

French giant CMA CGM is buying Singapore’s ailing Neptune Orient Lines for $2.4 billion plus debt. Offering majority owner Temasek and public shareholders close to book value – a 49 percent premium – looks generous. But the unlisted buyer can chart a course to value creation.

Rail deal’s logic loses steam under legal scrutiny

4 Dec 2015

Norfolk Southern rejected a $28 bln bid from Canadian Pacific, which could probably afford up to $33 bln. Regulatory approval is a bigger issue, though. The bar is high for railroad mergers, and this one likely falls short. It may be one deal that shouldn’t have left the station.

Global taxi app alliance will test faith in Uber

4 Dec 2015

Car-hailing firms in India, China, Southeast Asia and the United States will link their apps. It’s not clear how many people will use it or how revenue will be shared. The anti-Uber coalition’s main impact may be on the Silicon Valley darling’s ability to keep raising funds.

Indian sale makes Bain Capital rare buyout hero

27 Nov 2015

The U.S. firm has sold its remaining $116 mln stake in Hero MotoCorp four years after investing in the world’s largest motorbike maker. In rupee terms, Bain doubled its money in four years. As private equity pours into India, it’s a reminder that getting money out remains harder.

Qube edges ahead in Aussie infrastructure fight

26 Nov 2015

Brookfield’s $6.5 bln agreed bid for Australia’s Asciano has hit serious opposition from competition regulators. The Canadian group could yet salvage its takeover. But interloper Qube, whose break-up consortium is already examining Asciano’s books, now looks like the favourite.

Bombardier subsidies offer crucial but costly lift

19 Nov 2015

The Canadian aerospace firm’s rail unit agreed to a $1.5 bln infusion from Quebec, days after the province struck a deal to invest in its wobbly jet project. Public cash buys time but comes with pricey terms and governance risks. Potential mergers may be harder to pull off, too.

Rail deal needs more than $28 bln to stay on track

18 Nov 2015

Canadian Pacific justifies its hostile bid for Norfolk Southern by touting cost savings worth over $12 billion. But CP shareholders will keep $5 billion of that amount for themselves. Given antitrust risks, a higher offer will be necessary to bring this merger into the station.

New Chicago Skyway owners need long investing view

16 Nov 2015

Ferrovial and Macquarie paid $1.8 bln in 2005, $1 bln more than the next bid. Now three Canadian pension funds are buying the Windy City turnpike for $2.8 bln. Thanks to extra debt, the sellers won’t see much profit on their equity. At least the buyers can afford to be patient.

Savings may get $50 bln rail deal across the line

10 Nov 2015

The $22 bln Canadian Pacific could try to buy slightly larger Norfolk Southern. If CP can boost its U.S. rival’s efficiency to match its own, the result would be some $7 bln worth of cuts. That’s enough to cover a premium and compensate for the risk of an antitrust derailment.

China’s car-app war could end in Uber-Didi merger

17 Sep 2015

Uber’s Chinese unit and local rival Didi Kuaidi have raised a combined $4.2 bln this month to spend on subsidies to drivers. Now Didi has teamed up with U.S. competitor Lyft. But the battle is unsustainable. The obvious route to profitability is for Uber and Didi to join forces.

Bombardier steers clear of China turbulence

9 Sep 2015

The Canadian plane maker rejected an $8 bln offer for its rail unit from a state-controlled Beijing firm. Listing a minority stake is a politically easier way to reduce some balance sheet strain. Bombardier is in the wrong business, though, to be playing it financially safe.

Uber faces a competition pile-up in Asia

24 Aug 2015

The taxi-hailing app may be a Silicon Valley darling but it’s an underdog in China and India where tech giants are backing larger rivals. A competitor is even funding its top opponent in Southeast Asia. The anti-Uber alliance calls the group’s $51 bln valuation into question.

New York commuter crisis may be good for America

28 Jul 2015

Major delays on some of the busiest rail lines into Manhattan from New Jersey have incited outrage. The overhead wires being blamed are emblematic of the decrepit infrastructure across the country. After so much partisan bickering, this episode could focus minds on funding.

Chicago toll road owners may avoid highway to hell

21 Jul 2015

Macquarie and Ferrovial are shopping the fee-charging U.S. turnpike, a decade after buying it for $1.8 bln. The high debt and low earnings mean it’ll take a big valuation multiple to recoup the investment. Recent infrastructure deals suggest they could get one.

Uber has right on its side in New York City scrap

17 Jul 2015

The $50 bln ride-hailing app giant doesn’t help itself with its attitude to rules that hold back its business. And congestion in the Big Apple is a real concern. But Mayor Bill de Blasio’s plan to cap car-service growth pending study is just too convenient for the taxi industry.

Uber’s rocky ride hits smooth patch on Wall Street

8 Jul 2015

Opposition to the ride-hailing service is mounting from Paris to Mexico City to New Delhi. Silicon Valley’s $50 bln darling is getting a warm reception, however, from the likes of JPMorgan. Bankers are not only obvious customers, but also would love to drive Uber’s eventual IPO.

China taxi apps speed towards subsidy showdown

29 Jun 2015

Local taxi-hailing app Didi Kuaidi is raising up to $2 bln less than a month after rival Uber said it will invest $1 bln in the People’s Republic. Both are racing for market share by spending heavily on subsidies for drivers. The question is whose investors lose patience first.

Missing motorbikes point to Indonesian demand hole

19 Jun 2015

A 36 percent slide in motorcycle sales in May shows just how fast falling commodity prices are eroding purchasing power. More worrying, however, is President Joko Widodo’s failure to offset the shortfall by boosting investment. A weakening currency is compounding the challenge.