Breakingviews

Chancellor: Oil prices don’t need a Doha to rise

April 22, 2016

An agreement among feuding OPEC members to cut production may still be elusive. But the Saudis and other oil-producing nations are in no position to ramp up. As U.S. oil output is set to fall sharply this year, the price of energy is likely to keep heading upwards.

Cox: Who’s the Chinese buyer we’ve never heard of?

By Rob Cox
April 14, 2016

That’s the question every investment banker now asks when selling a company or asset anywhere in the world. M&A advisers are even flying China specialists across oceans for pitches. Anbang-like hiccups won’t stop the trend. But extra due diligence and vigilance is required.

Alaska Air pays through nosecone for U.S. Virgin

April 4, 2016

The carrier is securing coveted airport slots in its $2.6 bln deal for Richard Branson’s stateside flier. Cost savings are slim, however, leaving an expected sales uplift to justify the 87 pct premium. It’s a risky bet that the airline industry’s destructive ways have changed.

Anbang’s U.S. hotel block bookings getting pricey

March 14, 2016

The Chinese insurer is in a hurry, leading a $13 bln offer for Starwood on top of a $6.5 bln deal to buy Strategic Hotels from Blackstone and its $2 bln purchase of the Waldorf Astoria in 2014. It’s hard to see how they all meet Anbang Chairman Wu Xiaohui’s own financial targets.

Chinese tycoon’s U.S. movie merger has rare logic

March 4, 2016

Wang Jianlin’s AMC cinema group will buy American rival Carmike for $1.1 bln. It looks like a rational deal at a sensible price – something lacking from the property magnate’s recent splurge on movie studios, theme parks and soccer clubs. Perhaps financial reality is kicking in.

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.

How Symantec let bad math lead to a shaky deal

January 21, 2016

Carlyle’s buyout of the software company’s Veritas unit was never actually worth the $8 bln headline figure. Excessive leverage was dressed up to make it look workable. Even the new 8 pct price cut is misleading. Boards and investors can help themselves by getting M&A sums right.

Managerial competence makes the difference in 2016

By Rob Cox
January 5, 2016

Markets are getting choppier. Capital is becoming more expensive in the world’s largest economy. Globalization is taking big knocks. Economic growth is middling. Good managers will distinguish winners from losers as much as valuable assets do from lousy liabilities.

Global corporate profit is under serious threat

December 17, 2015

U.S. companies are earning close to the most in five decades as measured against national income. It’s a worldwide trend, with bottom lines far larger as a share of GDP than in 1980. Competition, disruption and tax policy – along with weaker growth – are set to change all that.

Indian sale makes Bain Capital rare buyout hero

November 27, 2015

The U.S. firm has sold its remaining $116 mln stake in Hero MotoCorp four years after investing in the world’s largest motorbike maker. In rupee terms, Bain doubled its money in four years. As private equity pours into India, it’s a reminder that getting money out remains harder.