Breakingviews

Woolworths pays too-steep ransom in Aussie battle

June 24, 2014

The South African group is buying billionaire Solomon Lew’s stake in an Australian unit in return for his support in its $2 bln takeover of retailer David Jones. The $201 mln side deal lifts the effective takeover premium – raising the pressure on Woolworths to realise synergies.

Oracle deal provides partly cloudy forecast

June 23, 2014

In a way the $5.3 bln deal for Micros is a relief for shareholders. Even if it’s the start of an M&A binge, it’s not at a crazy valuation. Then again, longtime partner Micros is more an add-on than a way to supercharge Oracle’s effort in the cloud. That challenge remains for now.

Investors beware: France will get more erratic

June 23, 2014

Paris is to buy most of Bouygues’ stake in Alstom in an expensive concession by François Hollande to his protectionist economy minister. Weakened by his unpopularity, the president seems increasingly unable to bring cohesion to his own cabinet. It can only get worse.

GE scores a Pyrrhic victory in France

June 20, 2014

The U.S. conglomerate has won the battle for Alstom’s energy businesses. It saw off nemesis Siemens and reached a truce with a hostile French state. Yet here’s a paradox: this is a clearer victory for Paris and Alstom than for GE itself. And it’s not all bad for Siemens either.

Paris forces GE into over-engineered Alstom bid

June 19, 2014

Take 3: out goes a simple $16 bln cash deal with some job promises. In comes a string of joint ventures to satisfy France’s taste for alliances and industrial champions. This looks less shareholder-friendly but more deliverable, and pulls GE further ahead of rival bidder Siemens.

Elon Musk applies his magic touch to M&A

June 18, 2014

The $350 mln acquisition of panel maker Silevo added $900 mln to SolarCity’s market value. It’s an investment in an efficient technology and a hedge against rising import tariffs. Manufacturing, however, is the riskiest part of solar. And Musk is a more proven builder than buyer.

China veto is wake-up call for world’s dealmakers

June 18, 2014

Beijing’s antitrust enforcer has sunk its first overseas transaction, killing a Maersk-led container-shipping alliance. The national interest in protecting local outfits made this tie-up especially vulnerable. But there’s a real risk China could torpedo other global deals.

Medtronic-Covidien is blast from M&A advisory past

June 17, 2014

A mega-merger can be an excuse to hire multiple Wall Street advisers, sometimes just by way of thanks for providing loans or other services. The two companies in Sunday’s $43 bln medical devices tie-up are using just one each. Bankers will be hoping the flashback doesn’t last.

Morgan Stanley email shame begs a tech solution

June 16, 2014

Messages sent by the bank’s head of M&A to Allergan look bad now that it works for hostile suitor Valeant. Merger practitioners, meanwhile, won’t like Allergan’s scorched-earth tactic releasing them. The episode does, however, prove there’s a market for a corporate Snapchat.

Medtronic-Covidien deal is marriage of convenience

June 16, 2014

The $42.9 bln takeover includes a near-$10 bln premium that exceeds the estimated value of synergies. Stents and sutures aren’t an obvious fit, and moving from Minneapolis to Dublin won’t cut Medtronic’s tax bill. Freeing up overseas cash is too shallow a reason to tie the knot.