Breakingviews

Oracle-NetSuite deal may be sweetest for Ellison

July 28, 2016

The business-software company is paying $9.3 bln, a whopping 44 pct premium, for a cloud-computing company effectively controlled by the Oracle CEO. The deal makes strategic sense, but Ellison looks to be once again cashing in on a side investment at Oracle's expense.

Yahoo fittingly closes portal on tech M&A misses

July 26, 2016

The $4.8 bln sale to Verizon caps two decades of deals and non-deals that shaped internet history. Yahoo got lucky with Alibaba, but failed to capitalize on its dominance with Google, Facebook and eBay. Spurning Microsoft also was a mistake. It's a one-company textbook on timing.

Verizon doubles down on ancient web history

July 25, 2016

The telecom giant is spending $4.8 bln on Yahoo's core business. CEO Lowell McAdam is betting he can attract digital advertisers by meshing the internet-search firm with AOL, another 1990s high-flier Verizon bought last year. Trouble is, Facebook and Google are too far ahead.

Monsanto may be overestimating independence

July 19, 2016

The U.S. crop giant rejected Bayer's latest $64 bln takeover offer, calling it "financially inadequate." To achieve the $125 a share on offer on its own over three years would be tough, however, even with aggressive assumptions. Monsanto boss Hugh Grant is protesting too much.

Yahoo’s failure clarifies future for U.S. spinoffs

July 15, 2016

The Treasury modified regulations on when splits can qualify for tax-free treatment. The move comes after the IRS declined to bless Yahoo's carve-out of its Alibaba stake. Similar deals have been on hold since. This reasonable government approach provides much-needed clarity.

Tech deal reboot exemplifies valuation disconnect

July 11, 2016

Videoconference gear maker Polycom scrapped a plan to be bought by Mitel and opted for a $2 bln LBO instead. Hefty synergies in the original merger orchestrated by Elliott oddly failed to impress investors. It's not just the newest technology where valuation thinking is screwy.

Hershey makes tempting but sticky takeover target

June 30, 2016

The $25 bln confectioner belongs with Mondelez's Cadbury. CEO Irene Rosenfeld may sniff sweet opportunity as the charitable trust that blocked past Hershey bids is roiled by scandal, and rival Kraft Heinz is still digesting its mega-deal. But it won't come cheaply.

Merger “synergies” can’t just be code for job cuts

June 8, 2016

Most mega-deals leave companies with fewer staff, and higher sales and profit per head, a Breakingviews analysis shows. That’s capitalism. But the mood is changing, at least in pro-market Britain. Synergies do exist, but those reliant on cutting jobs may get harder to realise.

Valeant may strain to engineer way out the in door

June 6, 2016

As the embattled drugmaker prepares to report its first results under a new CEO, it’s also seeking a new business model beyond acquisitions and price hikes. Financial razzmatazz sometimes works both ways, but Valeant’s debt and possible suitors could make it hard science.

Bayer’s Monsanto bid yields poor financial harvest

May 27, 2016

The German chemicals group’s rejected $62 bln offer for the seed maker already appeared to violate one of its key principles: stick to projects whose returns beat the cost of capital. Upping the price to win over Monsanto would take heroic sales-growth assumptions to stack up.