Allianz, Turkey, Nordic M&A. Catch up with the latest pandemic-related financial insights from Breakingviews here:
on a cross-border, 560 million euro tie-up. Finland’s 300 million euro Altia, which makes the Aquavit spirit, is acquiring Norwegian rival Arcus in an all-share deal that values the latter at 260 million euros. The Finnish group’s shareholders get 53.5% of the enlarged company, against the 55% that undisturbed share prices would imply. However, an 18 million euro transfer of value to Arcus is more than offset by a 22 million euro dividend to be paid to Altia investors.
The Finns’ slight upper hand is partly down to location. Arcus’s Norwegian domicile means its shares are more vulnerable to swings in global oil prices, which have been acute in the pandemic. Finland’s euro zone membership arguably makes the acquirer’s shares more stable. Both sets of investors will win if greater size gives the new entity more heft in price negotiations with Nordic retailers.
China can expect a decent economic rebound in 2021, but economic anxiety is warranted. While the pandemic appears under control, the recovery has been unbalanced and many long-standing issues have not been resolved. The macro leverage for the real economy has risen to 266% since the deleveraging campaign was put on hold in 2019. Even at 5%, Beijing will need to find a way to get more bang for the buck. Activist Nelson Peltz has scored an unlikely pandemic winner with London-listed Ferguson.
Ferguson has now risen 71% since Peltz revealed a 5% stake in June 2019. Over that time, the benchmark FTSE 100 index is up just 7%. Moving the primary listing to New York coulda further boost: Ferguson trades at 22.8 times estimated 2021 earnings, compared to U.S. rival Home Depot’s 24 times. First, however, it must demerge the UK business, which made a paltry $8 million of operating profit.
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