Breakingviews

With strong new backer, Olam gets what Noble needs

August 28, 2015

Mitsubishi is backing a Singapore-listed trader bashed by short-sellers, paying $1.1 bln at a big premium. Noble needs such a vote of confidence. But the Japanese group is actually endorsing Olam – a firm supported by Temasek that has been spared the worst of the commodity rout.

Glaxo sale comes with cheeky earnings side effect

August 21, 2015

UK pharmaceutical firm GlaxoSmithKline is selling a multiple sclerosis drug to Novartis for up to $1 bln. It’s a logical move and Glaxo gets a good price. The quirk: it will include proceeds from the one-off as part of underlying revenue. Pharma investors need to watch their core.

Corporate divorce expenses matter beyond activism

June 2, 2015

Acquisitive CEOs talk a lot more about deal synergies than costs. Warren Buffett once said he had never heard the word “dis-synergies” mentioned but had witnessed plenty. Managers under pressure to split companies may similarly overstate the negatives, but they’re still real.

Comcast’s boss should live to buy another day

April 23, 2015

A collapse of the $45 bln Time Warner Cable deal would leave controlling shareholder Brian Roberts with a second ugly scar. Overconfidence also contributed to a failed tilt at Disney a decade ago. Comcast rebounded with NBCU, which suggests Roberts will be back before too long.

Rob Cox: Pirelli flirts with joke version of hell

March 26, 2015

That’s where the chefs are British, the lovers Swiss and the mechanics French. Pirelli risks becoming the corporate equivalent: the management Italian (as in the joke), its owner a Chinese state enterprise, and other partners Russian. Minority investors won’t find it funny.

China rail merger reveals topsy-turvy reform logic

December 31, 2014

The People’s Republic is re-creating its domestic train-building monopoly to boost competitiveness abroad. State-backed CSR will buy almost identical CNR for $14.4 bln. Synergies may take time to realise but the new giant should be able to turn up the heat on foreign rivals.

Valeant’s activist deal too clever by half

November 18, 2014

The $45 bln drug company’s tilt at Allergan alongside Bill Ackman’s Pershing Square leaves it with just a modest windfall to show for a seven-month campaign that risked legally questionable tactics. Valeant boss Michael Pearson’s M&A experiment is not one to repeat.

Buffett’s $4.7 bln Duracell deal a double positive

November 13, 2014

Berkshire Hathaway is trading its Procter & Gamble stake for the consumer stalwart’s battery unit. Swapping a reliable staple for a declining business looks odd. But it’s tax-efficient and P&G’s injecting $1.8 bln of cash. Even with that, the seller’s getting a decent price.

Carlyle buys a shovel-maker for deal gold rush

November 5, 2014

The private equity firm is teaming up with publisher Euromoney for a $700 mln buyout of Dealogic, the financial data provider. With IPOs, debt issuance and M&A soaring, the acquisition will be a 2014 test of an old adage: in most booms it pays to sell the necessary tools.

LabCorp deal tests positive for value destruction

November 3, 2014

The firm that checks patients’ blood is paying $6.1 bln for clinical trial outsourcer Covance. The strategic logic is hazy. Shareholders’ financial diagnosis is damning, too. They swabbed some $700 mln off LabCorp as cost cuts fell far short of the 32 pct premium paid.