Apr 30, 2014 20:09 UTC

Exelon is overpaying, even with the sandbagging

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

Just about any way investors crunch the numbers, Exelon looks to be overpaying for Pepco. The utility appears to be low-balling the projected cost savings from its purchase of Washington, D.C.-based Pepco for $6.8 billion. But modesty won’t fool regulators. They always demand a cut through lower electric bills. Yet even assuming Exelon is sandbagging, it will struggle to justify the premium it is offering.

Apr 30, 2014 18:05 UTC

Energizer split leaves biggest problem intact

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

Energizer’s split into household and personal care companies should improve the $7 billion firm’s focus. It could also make one of the newly independent businesses an acquisition target. But the proposed transaction doesn’t address the batteries-to-tampons group’s bigger challenge: mustering more resources to take on industry gorilla Procter & Gamble.

Apr 29, 2014 06:46 UTC

Pfizer tax arbitrage will hasten more deals

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By Robert Cyran

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

Pfizer’s $99 billion tax arbitrage bid will encourage copycats. The biggest charm of the U.S. drug giant’s offer for AstraZeneca of the UK lies in switching to a lower-tax domicile. The latest and largest such deal to hit the headlines raises the odds Congress will tighten rules – but not yet.

Apr 28, 2014 15:36 UTC

Pfizer needs to do more to win AstraZeneca

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By Neil Unmack

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

Pfizer will need to pile on more pressure if it wants to buy AstraZeneca. The U.S. pharma group has confirmed that it made a $99 billion cash-and-stock approach for its UK peer in January, and is now renewing its suit. Astra Chief Executive Pascal Soriot may ultimately struggle to resist a takeover, but he ought to be able to extract a better proposal.

Apr 25, 2014 14:54 UTC

Alstom split would energise business units

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By Olaf Storbeck

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

Ending the days of Alstom as an unwieldy conglomerate would end many of its headaches. Given time, the group could probably take care of its problems on its own. Outside help would allow it to speed up the recovery. And General Electric could be a powerful catalyst for the transformation.

Apr 24, 2014 19:54 UTC

U.S. investors see yet another big acquirer as hip

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

 

U.S. investors are seeing yet another big acquirer as hip. Zimmer’s $13.4 billion deal for rival Biomet promises savings. But the maker of knee and other joint replacements and other medical devices is giving too much away for that to justify a 15 percent, or $2.3 billion, pop in its market value, before the stock slipped back slightly in Thursday morning trading. This time, enthusiastic share buyers are betting on growth.

Apr 24, 2014 13:52 UTC

GE/Alstom deal rumours test French reform drive

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By Pierre Briançon

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

In an ideal world where free people would roam across free markets, there would be much to like in a takeover of engineering group Alstom by General Electric. The French turbine and train maker, bailed out by taxpayer money 10 years ago, has been hit hard by the economic slump and Asian competition. Its future as a standalone company is in doubt. It needs cash that its shareholders – including Bouygues, with a 29 percent stake – are loath to fork out. Being folded into much larger GE would help it through bad times while some of its assets would fit nicely into the U.S. group.

Apr 22, 2014 18:27 UTC

Valeant can boost its $47 bln bid for Allergan

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

Valeant Pharmaceuticals has plenty of room to boost its bid for Allergan. The acquisition machine, working with hedge fund manager Bill Ackman, thinks it can cut at least $2.7 billion of costs from the Botox maker. At Valeant’s single-digit tax rate, that’s worth nearly $25 billion. And the potential benefits go on from there. The $47 billion deal, based on Monday’s closing price for Valeant stock, would still add up with a much bigger premium.

Apr 22, 2014 13:05 UTC

Dawn raid makes comeback via activist drone strike

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By Robert Cyran and Richard Beales
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Remember the dawn raid, when a would-be acquirer built up a stake before the target realized it was under attack? Activist investor Bill Ackman has come up with a kind of drone strike version. His Pershing Square Capital Management hedge fund and Valeant Pharmaceuticals have teamed up to grab a potential 9.7 percent stake in Allergan, with a hostile takeover by Valeant ready for deployment.

Apr 21, 2014 18:27 UTC

Barrick’s empire building deserves skeptical eye

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

Barrick Gold’s interest in a $33 billion merger with rival Newmont Mining deserves a skeptical eye. The world’s top gold miner by ounces produced is keen on a deal with the industry No. 2, according to news reports. Barrick’s outgoing founder and chairman, Peter Munk, admitted to “hubris” in past deals. Ex-Goldman Sachs banker John Thornton, who takes over next month, faces a considerable challenge convincing shareholders this won’t be another value-destroyer.