Breakingviews

Antitrust food fight messes up outlook for mergers

June 24, 2015

A U.S. court halted Sysco’s $3.5 bln US Foods purchase, saying the deal would probably harm national competition despite local rivals. A similar argument threatens Staples’ $6.3 bln bid for Office Depot. The bottom-line economics still look tasty, but legal precedent has soured.

Rob Cox: Don’t underestimate Exor’s John Elkann

June 23, 2015

Fiat Chrysler CEO Sergio Marchionne is the one leading a coercive charm offensive for car industry consolidation, but it wouldn’t be happening without the Agnelli scion’s support. Exor’s hostile bid for PartnerRe signals a hard-nosed approach that GM and others shouldn’t dismiss.

Tokio Marine learning lessons in value destruction

June 10, 2015

The 38 pct premium the Japanese insurer is paying in its $7.5 bln purchase of HCC is only half as absurd as in its two previous U.S. deals. Those extravagant forays should give it scope to cut costs. By slicing 15 pct of HCC’s overhead it might even finally make a deal stack up.

Intel chips in for elusive post-M&A pricing power

June 1, 2015

Its $17 bln swoop on Altera is the third big semiconductor deal of late. The six participants’ market caps have jumped by up to $35 bln. Cost cuts account for well under half that. The rest may reflect hopes that the acquirers can work magic on their top lines. That’s optimistic.

Altice’s $9 bln U.S. foray shows controlled ambition

May 20, 2015

Patrick Drahi’s telecoms group is paying 10.1 times EBITDA to enter the U.S. cable market. But cost-cutting should reduce the multiple, and it could be a springboard for further consolidation. It’s a more conservative step than another mooted deal: a tilt at Time Warner Cable.

It’s a good time for Visa to charge up in Europe

May 14, 2015

The U.S. payments company may be in talks to buy former subsidiary Visa Europe for up to $20 bln. A deal now, though complex to arrange, would bring global dominance and valuable cost savings. An existing put option also means acting now might well avoid a higher price later.

M&A predators stalk Michael Milken’s ball

April 29, 2015

The financial elite prowling Beverly Hills at the behest of the former Drexel Burnham boss worried about everything from China to cybersecurity to stock valuations. Three former Treasury chiefs lamented a lame Washington. When it came to deals, however, animal spirits ran wild.

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.

Agnellis pay up to claim mini-Buffett status

April 15, 2015

Exor, the Italian family’s holding company, is offering a premium to buy PartnerRe out of a merger with fellow reinsurer Axis. The price is full and the bid lacks its rival’s synergies. But debt is cheap, and Berkshire Hathaway-style cash flow could fund further acquisitions.

Shell-BG highlights rise of the micro-boutiques

April 8, 2015

The $70 bln deal needed just three advisers: Merrill, Goldman, and minnow Robey Warshaw. Rivals like Zaoui & Co have also won major mandates. For big M&A shops, two worrying trends are intersecting: CEOs seem ready to hire fewer banks per deal and to use much smaller outfits.