European telecoms will dial up more deals

December 16, 2014

Investors have brightened as M&A has swept the sector. Thanks to BT, Britain is up next. More mergers could follow in France, Italy and Belgium. What’s not to like? Well, windfalls from big cross-border deals looks distant and valuations already price in most of the good news.

Binding Staples to Office Depot only easy on paper

December 12, 2014

Activist Starboard may push for a $13 bln merger of the last two big U.S. office supply chains. Cost cuts enable Staples to pay a big premium and still generate good returns. Regulators might object, though, and too much debt is a risk with competition from Amazon and Wal-Mart.

Merck gives in to M&A frenzy risk assessment

December 9, 2014

Just hours after unveiling its $8.4 bln acquisition of Cubist, a judge invalidated patents owned by the antibiotics maker. Potential lost sales are reflected in the billions erased from Merck’s market value. The known liability was appraised through a rose-colored merger prism.

Merck bets $8.4 bln on more profitable antibiotics

December 8, 2014

For years, big pharma has left new work on bug control to small biotechs. But the mood is changing. Rising – and alarming – resistance to existing drugs and government incentives to develop new ones are injecting allure into companies like Cubist, Merck’s target.

Sinking rouble puts debt squeeze on Russia Inc

December 3, 2014

Most of Russia’s external debt is owed by the country’s banks and corporates. About $138 bln comes due in the next eighteen months. With the currency down 40 percent against the dollar this year, that will put a major strain on enterprises’ cashflows. Expect the state to step in.

If Vodafone wants Liberty it has to get creative

December 1, 2014

The mobile giant is eyeing cable group Liberty Global for a $90 bln-plus takeover. The strategic case is easier to make than the financial one. Regulators may be persuadable. Investors and Liberty Chairman John Malone could be colder. Vodafone has to be resourceful.

SABMiller’s Coca-Cola push is Africa buy signal

November 27, 2014

The UK brewer and the U.S. drinks giant are merging assets in southern and eastern Africa to create a soft-drinks bottler with $3 bln of sales. SAB gets control and gains market access. The move points to the continent’s strategic potential, and similar consolidation could follow.

BT is in strong position for mobile M&A

November 24, 2014

The fixed-line telco has shaken up UK communications by pushing into TV and now mobile. The reward is that BT has a choice of two mobile networks to buy, O2 or EE, and few likely counter-bidders. A 10 bln stg deal would help lift sales and protect BT’s broadband business.

Activist row bigger than Keystone for TransCanada

November 19, 2014

A sparring match with a dissident investor may be more important than the fate of the $35 bln Canadian group’s tar sands pipeline. Bay Street has welcomed activists, and the regulatory environment is favorable. But for now, TransCanada appears to have shareholders on its side.

AstraZeneca struggles to advance value defence

November 18, 2014

The UK pharma group fought Pfizer’s $120 bln bid in May by promising growth. It’s now reiterating punchy sales targets and casting oncology as a new growth driver. In fact, the Astra story has only inched forward. Its defence has been aided most by U.S. curbs on tax-driven M&A.