May 8, 2014 17:47 UTC

Yahoo’s Alibaba windfall tough to spend wisely

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By Richard Beales

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

More than ever in her nearly two-year tenure, Marissa Mayer needs to find the exclamation point in Yahoo’s business. After the company sells something like half of its 22.6 percent stake in Chinese e-commerce giant Alibaba, the Yahoo chief executive could have $12 billion on hand. Spending it wisely will be tough.

May 7, 2014 13:53 UTC

Alstom chase is distraction from Siemens revamp

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By Olaf Storbeck

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

Joe Kaeser has hammered out a plausible new strategy for Siemens. The new chief executive’s focus on internal reforms could make the unwieldy engineering giant less complex and more efficient. But Kaeser is simultaneously mulling a bid for the power assets of French rival Alstom – a big-bang acquisition that could foil “Vision 2020.”

May 7, 2014 06:11 UTC

Alibaba’s big reveal: high growth, odd governance

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By John Foley 

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

There are two things to know about Alibaba, which filed for an initial public offering in New York on May 6. First, China’s dominant e-commerce company is huge, and could be even bigger. Second, new investors will have little say in how it is run – the founders are keeping a firm grip.

May 6, 2014 21:37 UTC

Tax steroids justify Bayer’s $14 bln Merck deal

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

Bayer’s $14.2 billion acquisition of Merck’s consumer care business is less pricey than it looks. Non-prescription pharmaceuticals are among the most sought-after assets in global healthcare. Demand for “over the counter” drugs, driven by emerging markets, is growing at 4 percent to 5 percent a year. Revenue is unthreatened by patent cliffs and less vulnerable to regulatory interference. Strong OTC brands earn EBITDA margins of 30 percent and more.

May 6, 2014 14:06 UTC

Barclays shows why it needs to do a UBS

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By George Hay

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

Barclays has shown why it needs to “do a UBS”. Both the UK bank and its Swiss peer had a rotten time in their fixed-income trading operations in the first quarter, numbers released on May 6 show. The difference is that Barclays is only just understanding a problem that UBS attacked 18 months ago.

COMMENT

I feel there is little consistency in the way punters view Barclays,and everyone seems to rush to hasty conclusions about compensation and business lines.Firstly, there is little mention today post results of the fact that Barc seems increasingly balanced with commercial and retail revenues in positive territory.Second,Barclays has key competitive advantages in FI and technology,none of which are that easy to replicate, and in my opinion,worth preserving even at a short term cost, with economies of scale and crossproduct fertilisation being key to efficient management. On that basis, and with a somewhat improved cost base, Barclays might surprise the myriad of doomsday’s who say Barclays came late to restructuring.The fact is that you cannot walk away from your most profiled business (FICC) between two quarters, and also, I feel there is a failure to recognise that Barclays has always been very early to the party with respect to advancing its technology offering. I am in other words quite bullish

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May 5, 2014 18:52 UTC

Mini-me tech bubble is mere shadow of 2000 excess

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

The latest mini-me internet bubble is a mere shadow of the excesses that came crashing to an end in 2000. Sure, even though the run-up may have paused, the feverish signs are unmistakable. Dozens of companies are in line to float, hubris is rampant, oddball valuation metrics abound, and revenue-free startups are still worth fortunes. Even nerd culture has somehow become hip. The latest boom is as absurd as the last, but it’s far smaller.

May 2, 2014 08:10 UTC

Macquarie shows Wall St rivals a mirror image

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By Peter Thal Larsen

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

Attention, Wall Street investment banks. One of your rivals has just reported a 49 percent jump in full-year earnings, fuelled by unfashionable businesses like trading commodities and asset finance. It earns a double-digit return on equity with lower-than-average leverage. Oh, and its shares are up 50 percent in the past twelve months.

May 1, 2014 17:27 UTC

Astra has small tactical advantage over Pfizer

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By Christopher Hughes and Neil Unmack
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Time often benefits bidders rather than targets – that’s why U.S.-based food group Kraft left Cadbury flailing for months after making a takeover approach for its UK competitor. But the dynamics of Pfizer’s interest in rival pharmaceuticals group AstraZeneca are unusual. Pfizer has good reason to seek a quick, agreed deal.

May 1, 2014 17:10 UTC

Ford schools U.S. firms on turnarounds, succession

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By Antony Currie and Kevin Allison
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The end of Alan Mulally’s reign at Ford is corporate America’s opportunity to learn. In almost eight years as chief executive, the former Boeing executive not only engineered a textbook case in how to drive a company out of the scrap yard. He, along with Executive Chairman Bill Ford and the rest of the board, also did an enviable job of paving the way for his successor.

COMMENT

It always makes sense to invest in auto companies where the founding family still has a strong stake. They can make the tough decisions when necessary. BMW is another example.

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Apr 30, 2014 20:09 UTC

Exelon is overpaying, even with the sandbagging

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

Just about any way investors crunch the numbers, Exelon looks to be overpaying for Pepco. The utility appears to be low-balling the projected cost savings from its purchase of Washington, D.C.-based Pepco for $6.8 billion. But modesty won’t fool regulators. They always demand a cut through lower electric bills. Yet even assuming Exelon is sandbagging, it will struggle to justify the premium it is offering.