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   Strategies & Market TrendsSpeculating in Takeover Targets


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To: richardred who wrote (5233)7/20/2019 9:57:30 PM
From: richardred
   of 6084
 
Chinese Outbound M&A Plummets as Trade War Keeps Companies at Home By
Manuel Baigorri
and
Vinicy Chan

July 4, 2019, 5:00 PM EDT

At $35 billion, China outbound deal volume lowest since 2013

Deal volumes across Asia Pacific region have also declined

Closing Chinese outbound deals already was a difficult task. Growing trade tensions globally has made it even tougher.

At $35 billion, the volume of Chinese outbound mergers and acquisitions is the lowest tally for the first six months of the year since 2013, according to data compiled by Bloomberg. The total represents a 75% drop from the peak of such M&A activity in the first half of 2016, when China National Chemical Corp. agreed to buy Swiss agrochemical maker Syngenta AG for $43 billion.

Of the first-half total, only $6.8 billion was from U.S. acquisitions, representing a 17% drop from a year earlier. Among those deals, Chinese buyout firm Hony Capital Ltd. was part of a consortium that invested $700 million in U.S. filmmaker STX Entertainment, the data show.

Dealmakers say that trade tensions between the U.S. and China, which have led to rising tariffs on both countries’ goods, have clearly affected the pace of acquisitions.

“The trade war sentiment continues to weigh on overall outbound China M&A activity, and we expect this to particularly impact China-U.S. deals in the near future,” said Joseph Gallagher, head of Asia Pacific mergers and acquisitions at Credit Suisse Group AG.



And even though deal volumes have been falling for several years, “the recent escalation of trade tensions has probably accelerated the slowdown,” said Iain Drayton, Goldman Sachs Group Inc.’s co-chief operating officer for investment banking in Asia excluding Japan.

Expanding TensionsGlobal uncertainty goes beyond the U.S.-China trade war. Regulators including the Committee on Foreign Investment in the U.S., or CFIUS, and the European Commission have adopted a tougher stance in reviewing such sectors as technology and infrastructure, making it more difficult to complete transactions.

In April, one of the biggest deals ever collapsed as China Three Gorges Corp. ended its 9.1 billion-euro ($10.2 billion) takeover offer for Portuguese utility EDP-Energias de Portugal SA following concerns about regulatory approvals. Chinese companies have started focusing more on M&A within the Asia-Pacific region, Gallagher said.

More than 40% of the China outbound transactions in the first half of the year took place within the region, the Bloomberg-compiled data show. The biggest occurred in April, when a China-backed group agreed to invest $5.4 billion in Mindanao Islamic Telephone Co., or Mislatel, the Philippines’ third telecommunications provider.

Steady DeclineThe volume of Chinese cross-border deals has steadily fallen since 2016, not only as a consequence of tighter scrutiny from the U.S. and Europe. The splashy acquisitions by Chinese groups such as Dalian Wanda Group Co., Anbang Insurance Group Co. and HNA Group Co. were followed by a Chinese government crackdown on foreign investments.

Companies have also faced setbacks when investing in certain sectors in Australia, according to Rohit Chatterji, co-head of Asia Pacific M&A at JPMorgan Chase & Co. That said, they are still looking for acquisitions both domestically and in some overseas markets, Chatterji said.

“Japan, Korea, India and Southeast Asia have been very busy in M&A and are poised to remain active in the coming months,” he said.

Yet the Asia Pacific region has seen a sharp decline in deal activity in the first half of the year, with volumes dropping more than 30% from a year earlier, Bloomberg-compiled data show.



Southeast Asia has been one of the few bright spots for M&A as companies not only from China but globally seek to tap into the economic growth potential of Vietnam, Indonesia and the Philippines, according to Paul DiGiacomo, senior managing director at financial advisory firm BDA Partners.

Looking to AsiaThe biggest deal in the region so far this year is Blackstone Group’s $18.7 billion purchase of U.S. logistics properties from Singapore’s GLP Pte. Others include Telenor ASA’s talks with Axiata Group Bhd. to combine their Asian telecommunication operations.

Another source of deals has come from global companies reviewing their Asian footprint. France’s Carrefour SA agreed to sell an 80% stake in its China unit for 4.8 billion yuan ($698 million) in cash to local retailer Suning.com Co. German retailer Metro AG has been considering a sale of a majority stake in its Chinese business, people familiar with the matter have said. And Anheuser-Busch InBev NV, the world’s largest brewer, this week started taking orders for an initial public offering of its Asian operations, in what could be the biggest listing this year.

That’s not enough to offset the drop in volumes, however. The Chinese M&A market must materially recover for the region to show continued growth, said Mayooran Elalingam, head of Asia Pacific M&A at Deutsche Bank AG.

“China will continue to be challenged due to a multitude of factors, including the trade war, SOE reorganization, capital controls and general tightness in financing from local institutions,” he said.

bloomberg.com

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To: richardred who wrote (5233)7/20/2019 9:59:08 PM
From: richardred
   of 6084
 
Tokio Marine, which spent $17 billion on acquisitions, says there's more to come Bloomberg


    Jun 25, 2019

Tokio Marine Holdings Inc. is seeking acquisition opportunities in Asian emerging markets and elsewhere as it seeks to double profits from those regions, according to the new chief of Japan’s largest property-and-casualty insurer.

“We have group companies in Southeast Asia but they’re small,” Satoru Komiya, who became president Monday, said in an interview. “If we have a chance to make a further leap in the Philippines, Indonesia and Malaysia, we’d like to expand our business.”




Komiya’s quest to deepen the company’s global reach comes after it spent more than $17 billion (¥1.82 trillion) in the past 11 years on a string of large acquisitions overseas, Bloomberg data show. Tokio Marine and its Japanese competitors are looking abroad to diversify geographic risk and make up for diminishing prospects at home as the population shrinks.

The company is also looking for opportunities in emerging markets beyond Asia, such as Central and South America and the Middle East, said Komiya, 58, who was promoted from senior managing director in charge of overseas businesses. While it isn’t working on any specific deals now, the insurer has compiled a list of potential targets, he added.

“Valuations are high because of excess money globally,” he said. “But if there’s a good chance, we’d like to pursue it actively.”

Overseas insurance businesses now account for almost half of Tokio Marine’s profits, but these mainly U.S.-focused deals — including the purchase of Houston-based HCC Insurance Holdings Inc. for $7.5 billion in 2015 — have left Asia and other emerging markets as a minor contributor. The company has said it wants to increase the proportion of these regions’ profits to 20 percent of its overseas businesses, up from about 10 percent now.

There are early signs of Tokio Marine’s pivot to Asia deals. Last year, the company agreed to buy the Thai and Indonesian businesses of Sydney-based Insurance Australia Group Ltd. for about 525 million Australian dollars (¥56.2 billion).

Komiya said he’s paying more immediate attention to building the firm’s nonlife insurance business in Asia outside Japan. “Life insurance business takes time” to generate substantial profits, he said.

He is leaving open the possibility of large-scale acquisitions in the U.S. and Europe, where the company bought specialty insurers providing coverage for particular industries and liabilities, as opposed to general auto and home insurance. Tokio Marine HCC and other overseas units will continue to do smaller “bolt-on” acquisitions, the CEO added.

One specific challenge that Komiya is inheriting in his new role as president is a sexual harassment complaint at its U.K. unit. Two executives at Tokio Marine Kiln Group Ltd., a managing agent at Lloyd’s of London, have resigned following reports of the allegations.

Komiya said the unit has set up a third-party committee to investigate the matter and the holding company is being briefed. “We are monitoring the situation to make sure TMK will take appropriate measures,” he said in an emailed response to questions because the story broke after the interview.

japantimes.co.jp

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To: richardred who wrote (5305)7/20/2019 11:04:15 PM
From: richardred
1 Recommendation   of 6084
 
Sprouts featured on World’s Most Admired Companies list.

bizjournals.com


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From: E_K_S7/22/2019 9:13:47 AM
   of 6084
 
Peak Resorts +112% after coming off trading halt
Jul. 22, 2019 7:53 AM ET|About: Peak Resorts, Inc. (SKIS)|By: Clark Schultz, SA News Editor

Peak Resorts (NASDAQ: SKIS) opens for trading again following the resort operator's acquisition by Vail Resorts.

Shares of SKIS are up 112.35% in premarket action to $10.82 vs. the $11.00 deal price.

The transaction will still need to land regulatory clearance and shareholder approval before it closes.

-----------------------------------

Had this one on watch list but no position.

EKS

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To: E_K_S who wrote (5391)7/22/2019 10:48:58 AM
From: richardred
   of 6084
 
A nice premium for cash. I enjoyed skiing locally and in Vermont. I now have a nice pair of snow shoes for walking in Western NY winters.

P.S. Now that Skiing is in the limelight today. I'm wondering how receptive IPO AMF BOWLING INC (PIN) will be? The company has been through the ringer. I've taken note the PBA is back on TV again. I used to enjoy Chris Schenkel & Nelson Burton Jr.. I'm a Former AMF holder. Harvey I guy I used to work with at American Can..He was a Big Harley dealer in our area. His daughter runs it now. He was glad to hear AMF sold it off when I told him at work.



nasdaq.com

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To: E_K_S who wrote (5378)7/22/2019 11:10:36 AM
From: richardred
   of 6084
 
RE-BGS The way the stock is acting. I'm getting ready for the reality of a dividend cut. IMO just seems unsustainable moving forward. The stock might take an initial hit, but could stabilize afterward.

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From: E_K_S7/22/2019 2:47:34 PM
   of 6084
 
US Foods buys Arizona food service group for $1.8 billion
The deal, announced Monday, will bring Services Group of America’s food group into the US Foods Holding Corp. fold, adding five companies, $3.2 billion in annual sales and about 3,400 employees, with an expanded distribution footprint across the West and Midwest.

------------------------------------------------

More consolidation in the group. I noticed that SYSCO's merger w/ U.S. Food ($8Bln) was cancelled after FTC concern (anti-trust) .

4,804 viewsJun 29, 2015, 12:14pm

Sysco Cancels $8.2 Billion US Foods Takeover In Big Antitrust Win For FTC
----------------------------------------------------

I am wondering where UNFI fits in as a potential acquirer (no need to add to debt) or as the acquired.

UNFI's market cap still quite small when you compare to SYSCO & USFD. USFD has a $7.8Bln market Cap vs SYY of $36.5Bln vs UNFI $0.45 Bln

EKS

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To: richardred who wrote (5393)7/22/2019 3:57:11 PM
From: E_K_S
   of 6084
 
Looks like BGS could cut dividend by 25% or more. Going back at $0.21/share stock was at the same price. Would make sense if they used the savings to pay down debt. Little growth prospects in earnings until they have other high margin products.

Been watching the Food Service sector; SYY and USFD. I expect more consolidation.

EKS

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To: richardred who wrote (5288)7/23/2019 9:40:21 AM
From: richardred
   of 6084
 
RE-CTG speculation - Just a guess, but based as IBM being their largest customer and the PR statement. (Selected as one of two tier-one IT Staffing vendors for a new division at existing Fortune 500 client) RE-IBM completed the RED HAT acquisition. I'm thinking they landed some staffing business of Red Hat?

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To: richardred who wrote (5390)7/23/2019 10:09:01 AM
From: richardred
   of 6084
 
Picked up some Sprouts today on the downgrade and new low.

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