Mar 27, 2015 20:12 UTC

Dow Chemical tempts fate with $5 bln chlorine sale

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Dow Chemical CEO Liveris speaks during the CERAWEEK energy conference in Houston

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

Dow Chemical is tempting fate with its $5 billion chlorine sale. The $54 billion company is offloading the bulk of its low-margin bleach and vinyl-related operations to smaller rival Olin using an esoteric structure known as a reverse Morris Trust. The valuation looks solid, especially considering the tax savings. Yet investors should remain wary given the history of such complex deals.

Mar 26, 2015 22:00 UTC

Buffett-3G juggernaut can keep on truckin’

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Financial investor Warren Buffett looks on during an announcement ceremony at Northwestern University in Evanston

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

Warren Buffett and 3G Capital have created a fearsome M&A machine. Wednesday’s deal to merge consumer food giants Kraft and H.J. Heinz, worth some $80 billion, marks the boldest collaboration yet between the Sage of Omaha and the investors behind AB InBev, after earlier swoops on Heinz and Tim Hortons. The only barrier to even bigger deals may be 3G’s capacity for new projects.

Mar 26, 2015 14:52 UTC

Rob Cox: Pirelli flirts with joke version of hell

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Pirelli tyres are pictured in a tyre specialist center in Turin

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

In the old joke about a European version of hell, the cooks are British, the lovers Swiss and the mechanics French. With the $7.7 billion reshuffle of its ownership unveiled this week, Pirelli risks becoming the corporate equivalent: the management is Italian (as in the joke), its new owner will be a Chinese state enterprise, and other key partners are Russian. Minority investors won’t be laughing.

Mar 25, 2015 21:07 UTC

Kraft investors bet Heinz can refill secret sauce

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Variety of Heinz products are seen at convenience store in Golden

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

H.J. Heinz’s operating margins rocketed from 18 percent to 26 percent after 3G Capital and Warren Buffett’s Berkshire Hathaway took the ketchup maker private two years ago. In welcoming a merger that creates a company worth perhaps $80 billion, Kraft Foods investors are betting on more of the same.

Mar 18, 2015 16:48 UTC

U.S. mega-mall deal features bazaar tactics

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

U.S. operators of fancy retail complexes are showing similarities to far-flung bazaar traders. Mall owner Macerich rejected an unwanted $22 billion takeover bid from larger rival Simon Property. The premium on offer may be less valuable than claimed. Even so, the target company’s response is the more disingenuous haggle.

Mar 16, 2015 18:16 UTC

Valeant’s $11 bln bid may have scored two knockouts

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By Robert Cyran

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

The sweetened $11 billion bid by Valeant Pharmaceuticals for Salix Pharmaceuticals may have scored two knockouts. By stumping up an extra 10 percent from its previous offer, the acquisitive drugmaker now backed by hedge fund boss Bill Ackman put rival suitor Endo International on the mat. The extra cash required, and the debt already on its balance sheet, leave Valeant’s business model looking wobbly.

Mar 16, 2015 16:34 UTC

M&A world could teach niche U.S. colleges

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By Kate Duguid

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

Sweet Briar College’s collapse bodes ill for small U.S. private schools. The twin pressures of falling enrollment and rising costs threaten to bankrupt the tuition fee-based business model of many small colleges. Efforts to lure students in with deep discounts on sticker prices have locked some institutions into a bank-breaking spiral. Merging may be one way to ease the pressure.

Mar 9, 2015 18:29 UTC

Mall king’s $22 bln bid tests its hostile nature

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By Jeffrey Goldfarb

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

Simon Property is putting its hostile tendencies to the test again. Frustrated by being ignored in private negotiations, the biggest U.S. shopping center owner unveiled to the public its $22 billion offer to buy rival Macerich. Simon has used similar tactics before with mixed results. Real estate tends to require some aggression, but it can backfire.

Mar 5, 2015 21:09 UTC

AbbVie CEO may have overpaid again in $21 bln deal

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By Robert Cyran

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

AbbVie’s chief executive may have overpaid once again. Richard Gonzalez prompted the pharmaceutical giant to cough up $1.6 billion last year to free it from its bid for Irish drug manufacturer Shire. Now the company is paying $21 billion for biotech firm Pharmacyclics, after an intensely competitive auction. AbbVie may end up with a blockbuster medicine, but at too high a cost.

Mar 4, 2015 16:57 UTC

Actavis sale dresses up barely investment grade

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By Robert Cyran

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

Actavis is showcasing the value of being barely investment grade. The acquisitive drugmaker attracted huge demand this week for $21 billion of bonds a mere notch above junk. They yield less than Verizon’s bigger and better-rated issue did in 2013. Buyers of top-tier debt can’t help but keep looking further downward.