Edition:
United States

Chris Hughes

CRH’s $7.4 bln buy reveals M&A tolerance

Feb 02 2015

It’s a big bet. The Irish building group will increase leverage – even with a big equity issue – to buy surplus assets from Lafarge worth a third of its market cap. CRH got sucked into an auction too. Yet investors cheered. It’s how things work in a low-return, low-growth world.

Breakingviews: CRH's $7.4 bln buy reveals M&A tolerance

Feb 02 2015

LONDON (Reuters Breakingviews) - Here is a deal with all the red flags of M&A - ambition, leverage and a jumbo share placing. Yet the market is spurring on CRH's 6.5 billion euro ($7.4 billion) purchase of surplus assets from European cement rivals Lafarge and Holcim. The traditional criteria for judging such deals don't apply.

Breakingviews: WPP chair should be vertical as well as horizontal

Dec 17 2014

LONDON, Dec 17 (Reuters Breakingviews) - WPP may have found a much-needed counterweight to Martin Sorrell. The ad group's chief executive is getting a new chairman in the form of industrialist Roberto Quarta. Sorrell says Quarta will help deliver WPP's strategy, which includes a drive for greater "horizontality" - WPP-speak for operational seamlessness. But the new chair needs to make it clear early on that his location relative to Sorrell is more vertical than horizontal.

Saint-Gobain’s deal cunning could backfire

Dec 08 2014

The French materials group is seizing control of Swiss peer Sika by paying $2.8 bln for a minority family stake which has majority voting rights. Sika’s board is laudably indignant. And Saint-Gobain’s tactics have a hidden cost of upsetting other investors and the target’s staff.

Breakingviews: Market too cool on Aviva-Friends tie-up

Dec 02 2014

LONDON (Reuters Breakingviews) - Investors are being too cool about Aviva's agreed takeover of Friends Life . Given the history of value destruction in UK life insurance M&A, scepticism is warranted. Still, it's hard to see this combination being worth less than the sum of the parts.

Private equity shows signs of pre-crisis brio

Nov 25 2014

Canada’s Onex has bought Swiss packager SIG for up to $4.7 bln in a secondary buyout. It’s one of Europe’s biggest LBOs in five years and deploys pre-crisis levels of leverage. Private equity restlessness and a shortage of big targets created the conditions for a landmark deal.

Pru’s lesson for investors: trust animal spirits

Nov 21 2014

The UK insurer’s stock hit a record this week, leaving rival Aviva trailing in its wake. It is a painful reminder of how Aviva lost out by failing in its attempt to buy Pru in 2006. The main reason there was no deal? The bidder lacked investor support to pay a fair premium.

Pru’s lesson for investors: trust animal spirits

Nov 21 2014

The UK insurer’s stock hit a record this week, leaving rival Aviva trailing in its wake. It is a painful reminder of how Aviva lost out by failing in its attempt to buy Pru in 2006. The main reason there was no deal? The bidder lacked investor support to pay a fair premium.

Tesco chairman should step aside

Sep 24 2014

Richard Broadbent will struggle to restore market confidence in the UK retailer. This week’s accounting scandal compounds existing concerns about his period at the helm. The priority should be an orderly handover to the right successor. But speed matters too.

Tesco chairman approaches his sell-by date

Sep 22 2014

The UK retailer’s warning that guidance was overstated by 250 mln stg reflects a serious controls failing. Chair Richard Broadbent recently delivered a new CEO, but has been slow to fix the board. His own lack of retail experience is starting to look like a drawback.

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