Summit Notebook
Exclusive outtakes from industry leaders
How to gum up an exchange merger: salt water
It’s a puzzle M&A bankers and corporate executives have been trying to solve for years: how far from your home market can an acquisition take place and ultimately stumble over cultural differences? It’s a question that looms large as quintessentially Italian automaker Fiat prepares to swallow up Chrysler – inventor of the K-car and the minivan – and which reportedly haunts St Louis-based employees of Anheuser Busch in the aftermath of their company’s takeover by the penny pinching Belgians and Brazilians at InBev.
Gary Katz, CEO of Deutsche Boerse unit International Securities Exchange, insisted during his appearance at the Reuters Exchanges and Trading Summit that all has been sweetness and light since the Germans assumed control of the upstart American options exchange and that there has been “nearly zero turnover” since the takeover.
But Thomas Kloet, Chief Executive of Canadian exchange powerhouse TMX, was one of several executives at the summit who insisted that cross border mergers can often be a recipe for disaster and that the ideal mergers are “domestic roll-ups” like CME Group’s takeover of Nymex and the Chicago Board of Trade or indeed TSX Group’s takeover of the Montreal Exchange, which created TMX.
Implicitly criticizing some of the first-ever cross border deals in the sector like NYSE’s merger with Euronext, Kloet said: “there are significant regulatory differences that make cross border mergers pretty difficult to do, especially when they start passing over salt water, so to speak.”
Listen to the attached recording to hear the former ABN AMRO senior managing director’s ruminations on exchange M&A in full.
AUDIO – For Nordson — “Get ‘em right, or get ‘em out”
Throughout the current recession, many of the companies’ executives at this week’s Reuters Manufacturing and Transportation Summit have found an opportunity to review, pare back and possibly add on to their existing business mixes.
Such is the case for Edward Campbell, chief executive of Nordson Corp, which has a uniquely diversified set of businesses under its umbrella and is looking at what makes sense for them going forward.
Campbell makes the clear point that if something isn’t working for Nordson long term, the company has a responsibility to really consider whether that is a business they should be in.
Nordson makes a wide range of precision dispensing, testing and inspection, surface preparation and curing products. Its products can be found in everything from appliances to autos to bookbinding to furniture. It operates in three segments: adhesive dispensing systems, advanced technology systems and industrial coating and automotive systems.
Campbell said all of its businesses were subject to review, but did mention a couple that might be pared back in the attached audio clip.
Campbell was one of the featured speakers for the third day of the annual Manufacturing and Transportation Summit, which continues through Thursday in our Chicago offices. The Summit program is in its fifth year, and in 2009 will include top-level executives from industries and sectors including everything from Infrastructure; to Mining; to Investing in India, China, Japan and Russia; to Food and Beverages.
AUDIO – GE sees the problems … and the opportunities
On the first day of this year’s Reuters Manufacturing and Transportation Summit, one of the guests told us of the Chinese theory of the word “crisis” — the symbols for which are a combination of “problem” and “opportunity”.
On Tuesday, Vice Chairman John Rice told Reuters that both sides of the equation were in play for GE, but voiced confidence that the company would be able to hit its marks.
General Electric shares have had a tough run in 2009, but Rice’s comments — first reported by Reuters — did seem to turn the tide for GE on Tuesday, which had been lower on the day, but recently were 4 percent higher.
Rice, who runs GE’s Technology Infrastructure group, was one of the featured speakers at this year’s summit, which continues through Thursday in Chicago.
