Breakingviews

Baker Hughes wins tactical $35 bln battle

November 17, 2014

Playing hard-to-get squeezed a premium north of 50 pct out of Halliburton. The larger U.S. oil services group’s target of $2 bln in annual cost savings just about justifies the price it is paying. But integration challenges and competitive concerns make that look aggressive.

Halliburton can stump up $30 bln for Baker Hughes

November 14, 2014

That’s if the $46 bln U.S. oil services giant finds cost cuts worth 5 pct of its rival’s sales, in line with past deals in the sector. Banding together makes sense in an industry downturn. And Halliburton could offset the risk of paying a potential 40 pct premium by using shares.

Buffett’s $4.7 bln Duracell deal a double positive

November 13, 2014

Berkshire Hathaway is trading its Procter & Gamble stake for the consumer stalwart’s battery unit. Swapping a reliable staple for a declining business looks odd. But it’s tax-efficient and P&G’s injecting $1.8 bln of cash. Even with that, the seller’s getting a decent price.

Heady Topper points to beer business peak

November 13, 2014

The craze for this small-batch double IPA illustrates the potential for craft brewers to snaffle up both market and dollar share from Big Beer. That’s why AB InBev and others are on the prowl to buy indie brands. It’s great for drinkers, but makes for a very competitive dynamic.

SABMiller has fight to justify heady share price

November 13, 2014

The beer is getting weaker at the world’s No. 2 brewer. Volumes fell 1 pct in the first half. Australia, where SAB did its last big deal, is proving especially tricky. It is faring better in soft drinks. But the stock’s high rating has scant support without M&A upside.

Barclays’ forex delay looks like bad news

November 12, 2014

The UK bank says it is serving investors by deferring a settlement with the FCA and CFTC. Any gain from coordinating with other bodies needs to outweigh the loss of a quick-deal discount. Barclays knows from Libor that going solo is risky. Holding back suggests more is at stake.

FX fines are wake-up call on self-policing

November 12, 2014

The $3.4 bln settlement for five banks works out on average at 20 pct higher than Libor – because the firms failed to mend their ways. Regulators are seeking yet tougher internal controls. Banks have a last chance to show they can treat clients fairly.

Steve Cohen’s loot could land in undeserving hands

November 11, 2014

A $600 mln insider trading settlement with his SAC hedge fund will probably go to investors on the other side of its dodgy deals. Better them than Uncle Sam. But the real victims were drug firms whose data SAC’s trader stole. U.S. watchdogs miss the mark in allotting fine proceeds.

China embraces troublesome cult of consumption

November 11, 2014

E-commerce giant Alibaba shifted $2 billion of goods in the first hour of its “Singles’ Day” shopping festival. It looks like consumers are doing their bit to rebalance China’s economy. But like investment, consumption is a poor target. It can be wasteful as well as productive.

Sears investors too giddy about slow-mo breakup

November 7, 2014

The stock jumped 35 pct on news its hedge fund boss Eddie Lampert might create a REIT for many of its stores and lease them back. It’d raise much-needed cash. But shareholders, Lampert included, would finance the deal. And the prospects for the rump retailer remain pretty dim.