Jul 7, 2014 18:53 UTC

ADM goes M&A wild – sort of

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By Kevin Allison

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

Archer Daniels Midland is going merger wild – sort of. The $30 billion U.S. grain processor will pay about $3 billion for Wild Flavors, a Switzerland-based natural food flavoring and coloring specialist. Illinois-based ADM’s biggest-ever deal is a departure from its core milling and trading operation. Picking up a small add-on business with similar customers in a sexier part of the food chain makes sense, but it’s unlikely to change how investors see the firm any time soon.

Jul 2, 2014 16:55 UTC

Tax-arbitrage M&A requires a deep discount

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By Robert Cyran

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

Tax-arbitrage M&A requires a deep discount. U.S. companies seeking to relocate by mergers in a bid to slash how much they remit to Uncle Sam were a big part of the $1.8 trillion first-half deal boom. The benefits of such ill-conceived combinations will be fleeting, though. The more so-called inversions there are, the more likely the law is to change.

COMMENT

American multinational companies can always lobby Congress to prevent US taxes being applied to their profits in foreign countries. For the American expatriate working overseas, since June of last year, foreign banks will not accept his having an account with them due to the US Securities and Exchange laws. I know since it has happened to me.

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Jul 1, 2014 06:14 UTC

Private equity’s bad habit: Asian minority stakes

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By Una Galani

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

Private equity firms have developed a bad habit in Asia. They are investing record amounts in minority stakes in listed companies. Investors dislike such deals because they can buy the shares themselves. History also suggests that giving up control is fraught with risks.

COMMENT

With risk comes reward and as Asia continues to be a major engine of continued global economy growth, the PE investments may prove to be succintly sound.

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Jun 27, 2014 19:29 UTC

Soros takes sub-quantum leap into activism

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By Christopher Swann

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

Is George Soros turning activist? His $29 billion hedge fund has famously confronted governments. But facing off with a $1 billion U.S. oil and gas company is novel. The move gives underperforming corporate bosses another scourge to fear.

COMMENT

A family hedge fund worth $29 billion? As such, the fund is not required to file reports with the FCC, but it is OK to go after companies that are. How is this fair to public companies and their shareholders? Is Soros using high frequency trading and offshore dark pools to further tilt the playing field in his favor?

This type of fund is the best argument that I know of to enlarge the “estate tax” and use some of the proceeds for government regulation of these predatory behaviors. If this is not done, in the not to distant future we can look forward to the national dominance of yet another aristocratic class, if we are not there already.

Didn’t western civilization try this before? The social imbalances created led to centuries of warfare, including the development of fascism in the 20th century. I doubt that this is an outcome that Mr. Soros intends.

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Jun 24, 2014 19:14 UTC

Next stop: Siemens-Alstom train merger

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By Olaf Storbeck

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

Once the dust settles over the Alstom bidding war, Siemens and its French rival may want to revisit the most compelling aspect of the German company’s losing bid: a merger of both groups’ train-making units that would create the train equivalent of Airbus, the European aircraft maker.

Jun 24, 2014 08:47 UTC

Woolworths pays too-steep ransom in Aussie battle

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By Una Galani

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

Woolworths is paying too steep a ransom in its retail battle. The South African group is buying billionaire Solomon Lew’s stake in an Australian unit in an attempt to secure the billionaire’s support in its A$2.1 billion ($2 billion) takeover of upmarket department store chain David Jones. The side deal raises the effective takeover premium – and piles pressure on Woolworths to realise synergies.

Jun 23, 2014 18:38 UTC

Oracle deal provides partly cloudy forecast

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By Kevin Allison

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

Oracle’s $5.3 billion deal for Micros Systems provides a cloudy forecast for shareholders in the database giant. Even if it’s the start of a new deal binge by Chief Executive Larry Ellison – which is possible – it’s not at a crazy valuation. But longtime partner Micros is more of an add-on than a way to supercharge Oracle’s effort in the cloud.

Jun 23, 2014 13:32 UTC

Investors beware: France will get more erratic

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By Pierre Briançon

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

The French government didn’t have to buy a 20 percent stake in Alstom. It could have smugly observed that its intervention in the acquisition of the French engineer’s energy assets by General Electric had yielded some success. Pressure from Paris forced GE to rework its offer, giving France a decisive say in the future of Alstom’s nuclear business. With that concession secured, there was no good reason to buy out Alstom’s main shareholder, construction-to-telecom conglomerate Bouygues.

Jun 20, 2014 18:14 UTC

GE scores a Pyrrhic victory in France

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By Quentin Webb

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

There’s a paradox in General Electric’s French triumph. The U.S. conglomerate is finally getting Alstom’s energy businesses, having seen off German nemesis Siemens and reached an accommodation with a hostile French government. Yet some other players won clearer victories.

Jun 19, 2014 18:27 UTC

Paris forces GE into over-engineered Alstom bid

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By Quentin Webb

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

Paris has forced GE into an over-engineered bid for Alstom’s power businesses. The U.S. giant’s third tilt at its French counterpart overlays a series of tie-ups on the previously simple 11.4 billion euros ($15.6 bln) cash deal. The aim is to satisfy France’s taste for alliances and protective concern for an industrial champion. It all looks less shareholder-friendly – but also less prone to an Elysee Palace veto. That keeps GE ahead of rival bidders Siemens and Mitsubishi Heavy Industries.