Jul 15, 2014 17:14 UTC

Market has message for tobacco M&A trustbusters

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By Kevin Allison

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

American trustbusters deciding whether to approve Reynolds American’s $55 billion deal with Lorillard will want to heed the market’s message. The combined market cap of the No. 2 and No. 3 U.S. cigarette makers has jumped more than $10 billion since merger talk surfaced. Those gains can’t be justified by the cost savings on offer. Expectations of an increase in pricing power, through the creation of an effective tobacco duopoly, may best explain investors’ enthusiasm.

Jul 14, 2014 14:05 UTC

Life’s like a box of chocolates for Lindt owners

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By Quentin Webb

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

For Lindt shareholders, life is like a box of chocolates. They didn’t know they were going to get Russell Stover, the Midwest outfit whose gift box starred in Forrest Gump. They still don’t know what Lindt paid for the third-biggest U.S. candymaker. Or what it will get in terms of profitability.

Jul 14, 2014 07:08 UTC

WH Group’s revived IPO shows one lesson learnt

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By Una Galani

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

WH Group’s revived initial public offering shows it has learnt at least one lesson. After an attempt to sell shares two months ago ended in disaster, the Chinese pork producer has returned, cheaper and with fewer banks working on the deal. But it’s not clear why it is rushing back to market at all.

Jul 11, 2014 14:48 UTC

Imperial prepares $7 bln gamble

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By Chris Hughes

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

Investors think Imperial Tobacco has much to gain from a possible $56 billion merger of U.S. peers Reynolds American and Lorillard. The combination would require a large disposal programme to assuage antitrust regulators, and these forced sales could present bargains for the UK cigarette maker. The snag is that Imperial is short of cash – and the assets available may not be that attractive.

Jul 9, 2014 17:55 UTC

PetSmart activists barking up the right tree

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By Kevin Allison

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

PetSmart’s activist shareholders are barking up the right tree. Jana Partners and Longview Asset Management, which together own about a one-fifth stake, have commanded the U.S. purveyor of dog food and toys to roll over and sell itself. While there are other options to enhance shareholder returns, a deal with Petco, the smaller rival controlled by TPG and Leonard Green, could be the pick of the litter.

Jul 8, 2014 19:05 UTC

Shire can get more from AbbVie

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By Neil Unmack and Robert Cyran

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Shire can get more from AbbVie. The London-listed drugmaker is pondering a fresh, $51 billion unsolicited bid from its U.S. rival. AbbVie touts shareholder support and is offering a hefty premium, but Shire’s board can probably extract one more increase in return for their recommendation.

Jul 7, 2014 20:22 UTC

Doubling down on First Data may be KKR’s best bet

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By Jeffrey Goldfarb and Richard Beales

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Doubling down on First Data may have been KKR’s best bet. The extra cash just injected into the payment processor means the $29 billion acquisition has now absorbed over $10 billion of equity, one of the highest sums ever for a leveraged buyout. A Breakingviews analysis, however, suggests that a return finally beckons.

Jul 7, 2014 18:53 UTC

ADM goes M&A wild – sort of

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By Kevin Allison

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

Archer Daniels Midland is going merger wild – sort of. The $30 billion U.S. grain processor will pay about $3 billion for Wild Flavors, a Switzerland-based natural food flavoring and coloring specialist. Illinois-based ADM’s biggest-ever deal is a departure from its core milling and trading operation. Picking up a small add-on business with similar customers in a sexier part of the food chain makes sense, but it’s unlikely to change how investors see the firm any time soon.

Jul 2, 2014 16:55 UTC

Tax-arbitrage M&A requires a deep discount

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By Robert Cyran

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

Tax-arbitrage M&A requires a deep discount. U.S. companies seeking to relocate by mergers in a bid to slash how much they remit to Uncle Sam were a big part of the $1.8 trillion first-half deal boom. The benefits of such ill-conceived combinations will be fleeting, though. The more so-called inversions there are, the more likely the law is to change.

COMMENT

American multinational companies can always lobby Congress to prevent US taxes being applied to their profits in foreign countries. For the American expatriate working overseas, since June of last year, foreign banks will not accept his having an account with them due to the US Securities and Exchange laws. I know since it has happened to me.

Posted by expat75 | Report as abusive
Jun 27, 2014 19:29 UTC

Soros takes sub-quantum leap into activism

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By Christopher Swann

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

Is George Soros turning activist? His $29 billion hedge fund has famously confronted governments. But facing off with a $1 billion U.S. oil and gas company is novel. The move gives underperforming corporate bosses another scourge to fear.

COMMENT

A family hedge fund worth $29 billion? As such, the fund is not required to file reports with the FCC, but it is OK to go after companies that are. How is this fair to public companies and their shareholders? Is Soros using high frequency trading and offshore dark pools to further tilt the playing field in his favor?

This type of fund is the best argument that I know of to enlarge the “estate tax” and use some of the proceeds for government regulation of these predatory behaviors. If this is not done, in the not to distant future we can look forward to the national dominance of yet another aristocratic class, if we are not there already.

Didn’t western civilization try this before? The social imbalances created led to centuries of warfare, including the development of fascism in the 20th century. I doubt that this is an outcome that Mr. Soros intends.

Posted by mudinyoureye | Report as abusive