Bloomberg (April 3)
“Japan Inc. is on track to overtake China in overseas dealmaking for the first time in six years.” According to Bloomberg data, “Japanese companies have announced $26.9 billion of overseas acquisitions this year, compared with $16.5 billion by Chinese buyers.” The reversal is fueled by “a hunt for growth at Japanese firms…at a time when China’s most prolific acquirers have been hobbled by regulatory probes and new outbound investment rules.”
Tags: Acquirers, Acquisitions, China, Dealmaking, Growth, Japan Inc., Outbound investment, Overseas, Regulatory probes, Reversal
IPE Real Assets (October Issue)
With the uncertainty of Brexit, “REITs have been trading at discounts to net asset value (NAV) of around 15% to 25%.” Faced with scant opportunities, some are electing to return money to unitholders through buybacks or special dividends. But there is clearly a “disconnect between sentiment in the public markets and private markets.” As REITs encounter “limited opportunities in the office space, institutional investors, particularly global investors, have made many high-profile acquisitions.” This includes “the UK’s largest-ever office deal…in July when Hong Kong’s Infinitus Property Investment bought the iconic ‘Walkie Talkie’ building at 20 Fenchurch Street for £1.28bn.”
Tags: Acquisitions, Brexit, Buybacks, Disconnect, Discounts, Dividends, Hong Kong, Infinitus, Institutional investors, NAV, REITs, Sentiment, UK, Uncertainty, Unitholders
The Economist (September 23)
“Tensions over China’s industrial might now threaten the architecture of the global economy. America’s trade representative this week called China an ‘unprecedented’ threat that cannot be tamed by existing trade rules. The European Union, worried by a spate of Chinese acquisitions, is drafting stricter rules on foreign investment. And, all the while, China’s strategy for modernising its economy is adding further strain.”
Tags: Acquisitions, China, EU, Foreign investment, Global economy, Strain, Tension, Threat, Trade rules, U.S.
Institutional Investor (August 28)
“Chinese companies are the new force in global M&A.” With $51 billion of outbound M&A, China has surpassed both Japan ($37 billion) and Germany ($49 billion) during the first eight months of 2014. Though it still trails the U.S. ($174 billion), “mainland firms are stepping up the pace of foreign acquisitions, increasingly targeting technology and consumer plays in developed countries.”
Tags: Acquisitions, China, Consumer, Developed countries, Germany, Japan, M&A, Technology, U.S.
Financial Times (May 12)
There’s little obvious business sense to Pfizer’s proposed takeover of AstraZeneca. Strategically, there’s not much to be gained aside from effecting a change of tax domicile. “Pfizer’s dealmaking history is moreover a deeply dispiriting one…. Despite having spent some $240bn on three big acquisitions since 2000, its market capitalisation is just $185bn today. Meanwhile the Dow Jones index is more than 40 per cent higher.” AstraZeneca’s directors must proceed warily. This is about more than the potential short-term profit to existing shareholders.
Tags: Acquisitions, AstraZeneca, Dealmaking, Directors, Dow Jones, Market-cap, Pfizer, Profit, Shareholders, Short term, Strategy, Takeover, Tax domicile
Institutional Investor (May 8)
M&A appears poised to hit new highs. “Announced global deals this year have already hit $1 trillion as of the end of March, one of the highest quarterly levels since 1998 and almost double the level announced for the same period a year ago. The trend is reaching across industries and regional markets.” Several factors are driving the boom? M&A “reduces the uncertainty as to how surplus capital will get put to work and, with the cost of capital so low, raises the odds that acquisitions can boost future earnings growth.”
Tags: Acquisitions, Cost of capital, Earnings growth, Global deals, M&A, Surplus capital, Uncertainty
The Economist (January 18, 2014)
“With a string of deals the internet giant has positioned itself to become a big inventor, and reinventor, of hardware.” Google is becoming “the next GE,” with recent acquisitions spanning Nest Labs, Motorola Mobility and Boston Dynamics even as Google’s in-house engineers are “busy working on driverless cars and wearable gadgets such as Google Glass.”
Tags: Acquisitions, Boston Dynamics, Driverless cars, Engineers, GE, Google, Google Glass, Hardware, Inventor, Motorola Mobility, Nest Labs, Wearable gadgets
Institutional Investor (September 17)
“As the global recession and financial crisis recede in the rearview mirror, companies have been acting more proactively in using their balance sheets in ways that enhance shareholder value. But we think they can do more…. By mid-2013, U.S. companies were sitting on cash that was equivalent to about 11 percent of their total assets, a three-decade high and earning almost nothing.” Fortunately, there are signs of change. Companies “have become more receptive to using debt to buy back shares, increase dividends and make acquisitions.”
Tags: Acquisitions, Assets, Balance sheets, Buybacks, Cash, Debt, Dividends, Financial Crisis, Recession, Shareholder value, Shares, U.S.
