Breakingviews

Fed shows outsized concern for too-small-to-fail

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

The Federal Reserve reckons there may be a too-small-to-fail problem of sorts. The U.S. central bank spent nearly two years scrutinizing the tiny takeover of Utah-based Bonneville Bank by prepaid debit card firm Green Dot. The soundness of even niche banks matters. But in the too-big-to-fail era, the watchdog’s slow process is an unneeded deterrent to the sector’s small fry.

Rumble in rock garden presages more hostile M&A

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

A rumble in the rock garden may presage more hostile M&A. That’s one way to read the unsolicited $4.6 billion offer that Martin Marietta Materials made for larger rival Vulcan Materials. The all-stock deal won’t succeed without some more fill. But the lesson is clear: if profits can’t be mined from the ground, they can still be found by cutting costs.

JPMorgan faces tangle in cable M&A

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

JPMorgan may soon rank among Germany’s top cable-TV broadcasters. The U.S. investment bank committed to be a back-up buyer if regulators stop Liberty Global acquiring number three cable firm, Kabel Baden-Wuerttemberg. But if JPMorgan finds itself on the hook, that won’t automatically be the death knell for these unusual agreements.

Spanish banking sector to pay for its sins

By Fiona Maharg-Bravo
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Spain wants its banking sector to pay for its sins – literally. Banco Sabadell is taking troubled lender CAM off Madrid’s hands, and Spain’s bank-backed deposit guarantee fund is helping by making a big capital injection. Such deals minimise the cost to the taxpayer, but aren’t a free lunch for the state and won’t solve the sector’s problems.

Latin America gets closer even as Europe cracks

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

Almost two centuries ago, Simon Bolivar briefly united parts of what became more than a half-dozen Latin American nations. With the euro zone in turmoil, the notion of a single Latin American currency that partly reunites pieces of Bolivar’s Gran Colombia seems far-fetched. Yet with private companies from the Texas border to the tip of Patagonia cuddling up in mergers like never before, it can’t be ruled out for ever.

New England power merger deserves final nixing

By Rob Cox
The author is a Reuters Breakingviews columnist and Northeast Utilities customer. The opinions expresssed are his own.

It is now official: Northeast Utilities, New England’s biggest electric utility, failed in the duties that accompany its monopoly. With the release of a new report, regulators have all the evidence they need to power down Northeast Utilities’ $4.7 billion takeover of Massachusetts rival NSTAR.

Loan hangover will cast pall over European buyouts

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

Once again, banks in Europe have been left standing when the music stopped. In an echo of 2008, lenders backing private equity deals have found themselves with a big backlog of unsold loans. That bodes ill for future buyouts.

Exclusive: Ditching CEO won’t save US utility deal

By Rob Cox
The author is  a Reuters Breakingviews columnist and a Northeast Utilities customer. The opinions expressed are his own.

Northeast Utilities made an offering at the altar of the regulatory gods. The New England utility parted ways with the executive who headed its biggest division, Connecticut Light & Power, over its poor handling of two storms that left millions of customers without power for weeks. Investors seemed to think that will help it gain approval for a $4.7 billion takeover of rival NSTAR. Their optimism looks misplaced.

Music gods again divert EMI’s destiny

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

The music gods have meddled again with EMI’s destiny. In the minds of financiers and industry wags, the union of the British music group – home to the Beatles and the Beastie Boys – with U.S. rival Warner Music was just a matter of time. But the star-crossed match has been knocked off course again by the sale of EMI’s two divisions to Sony and Vivendi’s Universal Music.

When is a merger-of-equals really a takeover?

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

When is a merger-of-equals really a takeover? One easy way to tell is when the top brass get rich and undeserved paydays. There’s probably no better live example than the just-delayed sale of Massachusetts electric utility NSTAR. Its top five executives could feast on as much as $50 million in severance and change-of-control payments despite labeling their deal as one of mutual control for both sets of shareholders. As regulators probe the union more deeply, investors may want to do the same.