Indian tycoon’s $9 bln tidy-up is too clever

August 15, 2016

Kumar Mangalam Birla is merging two holding companies. That helps streamline his Aditya Birla conglomerate. But the overly complex deal gives investors on both sides reasons to grumble. One side is forced to share a healthy balance sheet and the other a promising financial arm.

Yum’s China split doesn’t look too tasty right now

May 23, 2016

The KFC owner’s break-up plan was a sensible victory for activists. But worries about China mean this hasn’t yet done much for shareholders. With one of Yum China’s most logical partners walking away from a pre-spinoff investment, it may be even longer before value is created.

AIG makes late push toward mediocrity

January 26, 2016

The mega-insurer unveiled plans to sell businesses, slash costs and return $25 bln to shareholders. That’d be a lot for most companies under siege from an activist like Carl Icahn. It’ll only get AIG to a subpar return on equity of 9 pct. This breakup story has further to go.

ConAgra carve-up gives activists just a slice

November 18, 2015

The $17 bln food giant is separating frozen fries from Chef Boyardee and Slim Jim. It’s the second big move for fast-acting boss Sean Connolly who joined in April and was followed into ConAgra by pushy investor Jana. Spinning rather than selling, however, demands more patience.

Yahoo’s Alibaba spinoff attracts big discount

February 12, 2015

The company’s plan to distribute its stake in the Chinese company hasn’t excited investors. A Breakingviews calculator suggests they are attaching a 34 pct discount to the U.S. tech firm’s Alibaba shares – assuming Yahoo’s core business is worth something. That’s too cautious.

E.ON’s “bad power” spinoff promises little upside

December 1, 2014

Germany’s largest utility is exiting conventional generation, bundling unwanted risk into a new company to be handed to shareholders. E.ON can concentrate on distribution and clean electricity. Both managements will benefit from focus. Still, the new entity’s prospects are bleak.

Duracell jolt highlights the value of focus at P&G

October 24, 2014

Investors were energized by the consumer-goods giant’s plan to offload its struggling batteries arm. Spinning off a low-growth commodity business won’t create much value on its own. But it’s a solid step in boss A.G. Lafley’s campaign to simplify the sprawling $225 bln firm.

Spin-off trend isn’t just for investment bankers

August 30, 2011

Conglomerates, even relatively focused ones, are out of favor. Hence companies from Hewlett-Packard to Kraft Foods to ConocoPhillips have in recent weeks decided to split into pieces.

More corporate carve-ups to delight M&A bankers

December 28, 2011

2011 was the year of the spinoff. Fiat, ConocoPhillips and ITT helped deal volume nearly sextuple to $230 bln. Rocky economic times probably won’t give CEOs much reason to shop, so 2012 could bring still more. Maybe even holdouts like GE, Goldman and Pepsi will consider a split.

Douwe Egberts listing has to create its own buzz

June 6, 2012

Sara Lee’s $5 bln-plus coffee spin-off is percolating towards the Amsterdam exchange. The maker of Douwe Egberts is uncomfortably big in sleepy bits of the coffee market. But the cast-off could thrive if its top team capitalises on lessons learned in beer and baby food.