Mar 26, 2015 22:00 UTC

Buffett-3G juggernaut can keep on truckin’

Photo

Financial investor Warren Buffett looks on during an announcement ceremony at Northwestern University in Evanston

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Warren Buffett and 3G Capital have created a fearsome M&A machine. Wednesday’s deal to merge consumer food giants Kraft and H.J. Heinz, worth some $80 billion, marks the boldest collaboration yet between the Sage of Omaha and the investors behind AB InBev, after earlier swoops on Heinz and Tim Hortons. The only barrier to even bigger deals may be 3G’s capacity for new projects.

Mar 26, 2015 14:52 UTC

Rob Cox: Pirelli flirts with joke version of hell

Photo

Pirelli tyres are pictured in a tyre specialist center in Turin

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

In the old joke about a European version of hell, the cooks are British, the lovers Swiss and the mechanics French. With the $7.7 billion reshuffle of its ownership unveiled this week, Pirelli risks becoming the corporate equivalent: the management is Italian (as in the joke), its new owner will be a Chinese state enterprise, and other key partners are Russian. Minority investors won’t be laughing.

Mar 25, 2015 21:07 UTC

Kraft investors bet Heinz can refill secret sauce

Photo

Variety of Heinz products are seen at convenience store in Golden

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

H.J. Heinz’s operating margins rocketed from 18 percent to 26 percent after 3G Capital and Warren Buffett’s Berkshire Hathaway took the ketchup maker private two years ago. In welcoming a merger that creates a company worth perhaps $80 billion, Kraft Foods investors are betting on more of the same.

Mar 23, 2015 15:05 UTC

Tronchetti and China pitch Pirelli price cleverly

Photo

REUTERS/Kai Pfaffenbach

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Pirelli’s would-be new owners have pitched their price cleverly. Marco Tronchetti Provera, the Italian tyremaker’s chairman and a leading shareholder, has teamed up with state-owned China National Chemical Corporation to buy and then delist the company’s shares. The deal highlights how Italian companies are up for sale to foreign owners, even at ungenerous prices.

Mar 18, 2015 16:48 UTC

U.S. mega-mall deal features bazaar tactics

Photo

mall.jpg

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

U.S. operators of fancy retail complexes are showing similarities to far-flung bazaar traders. Mall owner Macerich rejected an unwanted $22 billion takeover bid from larger rival Simon Property. The premium on offer may be less valuable than claimed. Even so, the target company’s response is the more disingenuous haggle.

Mar 16, 2015 18:16 UTC

Valeant’s $11 bln bid may have scored two knockouts

Photo

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The sweetened $11 billion bid by Valeant Pharmaceuticals for Salix Pharmaceuticals may have scored two knockouts. By stumping up an extra 10 percent from its previous offer, the acquisitive drugmaker now backed by hedge fund boss Bill Ackman put rival suitor Endo International on the mat. The extra cash required, and the debt already on its balance sheet, leave Valeant’s business model looking wobbly.

Mar 16, 2015 16:34 UTC
kateduguid

M&A world could teach niche U.S. colleges

Photo

By Kate Duguid

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Sweet Briar College’s collapse bodes ill for small U.S. private schools. The twin pressures of falling enrollment and rising costs threaten to bankrupt the tuition fee-based business model of many small colleges. Efforts to lure students in with deep discounts on sticker prices have locked some institutions into a bank-breaking spiral. Merging may be one way to ease the pressure.

Mar 16, 2015 10:40 UTC

GE’s crumbs make for Australian buyout feast

Photo

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

General Electric’s desire to shrink its finance arm has served up a takeover feast down under. The sale of the U.S. conglomerate’s Australian consumer lending business ranks as the country’s largest-ever private equity transaction. But it’s little more than a rounding error on GE’s balance sheet.

Mar 13, 2015 12:21 UTC

Holcim can push for more in Lafarge tie-up

Photo

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Holcim can secure a better deal from Lafarge. The Swiss cement group is outrunning its French rival, creating cracks in their $44 billion tie-up. Deal failure would hurt both groups. So concessions are more likely than the premature end of this “merger of equals,” as happened with advertising powerhouses Publicis and Omnicom last year.

Mar 9, 2015 18:29 UTC

Mall king’s $22 bln bid tests its hostile nature

Photo

By Jeffrey Goldfarb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Simon Property is putting its hostile tendencies to the test again. Frustrated by being ignored in private negotiations, the biggest U.S. shopping center owner unveiled to the public its $22 billion offer to buy rival Macerich. Simon has used similar tactics before with mixed results. Real estate tends to require some aggression, but it can backfire.