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Tuesday, January 06, 2009 |
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Broken China
Now news comes that Waterford Wedgwood has gone into receivership, a victim of the decline in purchasing luxury goods. The company has been losing money for five years, and clearly the Royal Doulton acquisition made their situation even worse. The company has been looking for a buyer, but with no luck so far. 8:45:01 PM |
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Wednesday, December 24, 2008 |
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Tuesday, December 09, 2008 |
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LCD price fixers "sorry" The three all supply displays to Apple Computer, Sharp also sells to Motorola and Dell. LCD screens are $8 billion industry worldwide. Japanese, EU, and South Korean government is still investigating price-fixing by these companies in its jurisdiction. 5:59:20 PM |
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Monday, December 08, 2008 |
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More medical deals Swiss-based Roche agreed to buy US-based Memory Pharmaceuticals, which does Alzheimer's research, a $50 million deal. Roche is already working on possible Alzheimer's cures. Roche is still persisting in its offer to buy US biotech company Genentech. Over $43 billion is on the table. Meanwhile, the acquisition of Barr Pharmaceuticals by generic drugmaker Teva is being completed. The deal was for 7.5 billion. Teva is selling seventeen duplicate drugs to competitor Watson Pharmaceuticals, in an attempt to avoid antitrust actions. Other big deals that have finally closed are Eli Lilly's $6.5 billion takeover of ImClone and Daiichi Sankyo's $4.1 billion purchase of Ranbaxy. 8:19:17 PM |
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Tuesday, December 02, 2008 |
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Brands and the (incredible shrinking) Big Three "Just how serious are they about shrinking their vast lineups of different brands and models to match the current harsh reality of the market?" That’s the key question asked in the New York Times t "Big Three May Need to Trim Number of Brands," 12/1/08). The article points out that Ford, GM, and Chrysler together have 112 different car and truck models using 15 brands (makes) in the US. By contrast, the big three Japanese companies (Toyota, Honda, Nissan) have only 58 models. A confusing array of reports are out on whether Ford will sell off its Volvo division, Both Ford and GM are in talks with the Swedish government, but it is clear that EU competition rules would make it hard for Sweden to just step in and "rescue" the companies. Beside, the fall in Volvo sales is even more catastrophic than that of the other failing GM brands. Who in their right mind would pay anything for these brands? GM has been trying all year with no success to sell its Hummer brands. It also has been thinking about selling both the Saab and Saturn brands. Pontiac may also be on the chopping block. But who wants them? But dropping brands is not so easy, even if you despair of selling them. In 2000, GM dropped its Oldsmobile brands, but it took four years and two billion dollars to make good with employees and dealers. Over the last few years, Ford and GM have sold off whatever they could. On Nov 17, GM sold its remaining stake in Suzuki Motors for around $200 million. Ford sold in 2007 its Jaguar, Aston Martin, and Land Rover brands. It has also sold most of its stake in Japan’s Mazda for $540 million. In 2006, GM sold off its stake in Isuzu and in Fuji Heavy Industries (Subaru) as well as its main stake in Suzuki). All the properties that these companies greedily snapped up in the 1990’s were sold off in a rush. All that cash went to slow down the burn rate, but couldn’t make the companies profitable. But there are still too many brands. GM and Ford spend fortunes trying to convince users to buy slight variations on the same model. The strategy of pseudo variety worked well when the Big Three rules the world, but now the excess variety doesn't protect market share, while flagship brands like Toyota's Corolla and Honda's Accord point to safe, well-engineering, constantly improved products that make car buying a lot easier. 7:47:42 PM |
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Monday, December 01, 2008 |
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Wherein my taxes fund Citigroup's new acquisition First was the knowledge that Citigroup was in a bad way thanks to bad loans and credit cards. Then Citigroup tried to buy rival Wachovia, but was beaten out by Wells Fargo. Then came a new bailout of Citigroup by the US government, in a somewhat murky deal that covered bad assets and gave operating capital. The bailout for Citi, which protects the company from $306 billion of high-risk assets and puts $20 billion of new capital in Citi’s hands, is the biggest bank bailout ever. (And the anger that resulted when it was realized that the company was still going to spend $400 million dollars to get naming rights for the New York Mets baseball club stadium.) Now the next shoe drops. A fund owned by Citigroup has reached an agreement to buy a company called Itinere Infraestrcuturas Sa from Spanish constitution company Sacyr Vallehermosa Sa in a $10 billion deal. Sacyr is the #5 construction company in Spain, also owning oil resources and hospitals. The Itinere Infraestrcuturas Sa division owns toll roads in Spain, Portugal, and South America. Citigroup plans to sell off over a billion in highway assets to Spain’s Abertis Infraestructuras SA and Italy’s Atlantia SpA. Observers see the buy as a bargain, thanks to Sacyr’s need for cash to cover $5 billion in debt. Citi was seen as interested in expanding the ownership of toll roads across the world, a strategy that may fit in with a US move to increase spending on infrastructure. So let’s get this straight. Not only are US taxpayers paying for the Citi’s name on the Mets’ stadium buy, but we are also helping it make bets on the market as it acquires new companies, rather than trying to get its own house in order.What is going on here? 8:34:07 PM |
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Friday, November 21, 2008 |
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Wednesday, November 19, 2008 |
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DHL expresses itself out of US market 5:32:34 PM |
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Tuesday, November 18, 2008 |
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Monday, November 03, 2008 |
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Banks to use bailout money for more acquisitions
Now it turns out that that the federal money was used by PNC Financial to make its $5.8 billion purchase of National City. "PNC said it had received $7.7 billion in cash through selling stock to the government under the program." And clearly that money went into the buyout. 10:37:55 PM |
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Friday, October 31, 2008 |
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Delta (finally) acquires Northwest 4:48:48 PM |
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Tuesday, October 28, 2008 |
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PNC buys National City
While mergers and acquisitions are lagging across the board due to lack of financing and perceived risk, financial institutions are still buying, In this case, it strikes home for me. My bank, PNC Financial (Pennsylvania's largest bank) announced it would buy Ohio-based National City Bank for $6.3 billion.
The merger of the two regional banks would create the fifth-largest US bank by deposits, While PNC managed to avoid the worst of the subprime mess, National City, accoridng to Bloomberg News, had been among the top ten subprime lenders nationally. Like WaMu and Wachovia, its folly lead to a takeover by a slightly smarter bank.
National City did manage to sell off its subprime loan unit, First Franklin Financial, to Merrill Lynch in 2006, leading to that company's demise. But then with proceeds, it bought Florida-based banks Fidelity Bankshares Inc. for $1 billion and Harbor Florida Bancshares for $1.1 billion the same year, These two loaded it down with a fresh set of losing mortgages.
Nation City has more than 1,400 branches, mostly in Ohio and Michigan. PNC bank branches are in Pennsylvania primarily, and number about 1,350. Retail banking is likely to remain profitable, if prudently mnaged, even in the worst of teh recession.
This rgeional bank tieup follows the move by Wells Fargo to become one of the four nationwide banks. All likelihood is mre regional bank mergers. 8:42:36 PM |
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Monday, October 13, 2008 |
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Broken deals Among the almost-concluded acquisitions that have fallen on hard times just this week are:
All of these were preceded earlier in the year by the biggest hostile bid of all: 7:36:48 PM |
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Sunday, October 05, 2008 |
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Wells Fargo: New King of the Hill?
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Monday, September 29, 2008 |
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Another one bites the dust 11:40:38 PM |
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Sunday, September 28, 2008 |
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JP Morgan'a turn The current financial crisis seems to be a great opportunity for those who have cash and the ability to make a snap decision, that is, the ones that didn't get stuck holding too much bad paper/ As we pointed out before, Bank of America managed to acquire both Countrywide (private mortgage bank) and Merrill Lynch (broker and investment bank) at bargain prices. 8:57:16 PM |
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Sunday, September 21, 2008 |
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Bank of America - too enormous to fail
Over the past four years, the company has acquired large assets including MBNA (the leading credit card issuer) and FleetBoston, the largest bank in New England.
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Wednesday, September 17, 2008 |
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The Titanic goes down, the captain sails off How many more companies will this "free market" administration have to rescue with nonexistent taxpayer dollars? GM, Ford, and Chrysler? WaMu and Wachovia? Maybe ExxonMobil and General Electric will be next. How will the Fed be ablke to tell the difference between companies that deserve bailout (Bear Stearns) and those that don't (Lehman Brothers)? Is it the one that has behaved the most recklessly the one that gets the big money rescue? 7:21:30 PM |
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Monday, September 15, 2008 |
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Tuesday, September 09, 2008 |
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De-verticalization in the energy industry
Here are some of the trends I see. The big Western oil companies, Shell, ExxonMobil, Bp, were once involved in a vertical command of the industry, from exploration to exploiting and maintaining oil fields to delivery to refinery to retail. Over the years they have move away from that stance, trying to get out of less profitable layers of the business. That means that Big Oil is getting out of retailing (ConocoPhillips, the latest. just sold its 600 US service stations to a privately held firm for $600 million). They are getting out of risky exploration and exploitation projects in Russia, Africa, and Central Asia. (Note that Chinese and Indian companies are taking on those risks). The bigs are buying developed fields in Western countries (US, Australia, Canada, North Sea). That leaves the field open for smaller companies and especially non-Western companies to take up the slack. 8:48:01 PM |