(Exane) Danone Stay Undeperf., anone will be the slowest growing food stock

* An in-depth dive into likely near-term milk trends and their implications
Longstanding readers of our research (if there are any) may recall our historical obsession with
matters of a lactose nature. Coupling this with a precipitous collapse in milk price indicators, in this
note we take an in-depth dive into milk price trends and the implications for Danone.
* FY14: Emmanuel Faber should take the opportunity to rebase margins
Our analysis shows that relief in H214 input costs (we estimate liquid prices will decline 7%
sequentially and powder prices by 6%) will not be sufficient to deliver FY margins. Guidance can
only be delivered via further pricing actions and A&P declines. Neither are in the long-term
interests of the business. The forthcoming new CEO (not in place until 01st Oct), Emmanuel Faber,
should not miss the opportunity to rebase (we suggest lowering the FY14 LFL margin guidance to
–70bp from +/-20bp). Further, rebasing would provide much needed evidence of his independence.
* FY15: Milk deflation should boost margins, but will drag the top-line
Conversely, as milk deflation takes hold in FY15 (we estimate liquid at –10% YOY and powder at –
16% YOY) we envisage material margin expansion (+50bp). There are however two issues: (i)
consensus already anticipates this & (ii) we believe that the entire yoghurt category (at least in the
developed world) will likely be plunged into material top-line deflation…
* FY15: Danone will be the slowest growing food stock
As a consequence of yoghurt category deflation, we believe that Danone will struggle to generate
positive LFL sales growth in Dairy in FY15 (we look for flat) which leaves us with FY15e group LFL
sales growth of only 4.0% (cf. Nestle at 5.5% and Unilever at +5.1%).
* Conclusion: content to stay Underperform
While we concede that a FY14 warning is arguably somewhat anticipated, we believe not wholly
so. Furthermore, wrt. FY15, we believe the market has focused on the bottom-line implications of
milk, but missed the top-line impact. The slowest growing food stock is no grounds for a re-rating.

>>> Rusal may spin off Norilsk Nickel stake into newco

Rusal may spin off Norilsk Nickel stake into newco

Rusal, the aluminum company owned by En+, the holding owned by Oleg Deripaska, could spin off its 28% stake in Norilsk Nickel into a newco, according to a newswire report. The report carried on Bloomberg yesterday 18 September cited En+ CEO Maxim Sokov, who said that the spin-off might include some of Rusal's debt. The report said that part of Rusal's USD 10bn debt was created when it acquired the Norilsk stake in 2008.

The item cited Sokov as saying that this would allow Rusal to resume paying dividends.

The item cited Sokov as reiterating that Rusal had no intention of selling the Norilsk stake.

Sokov added that En+ had no intention of delisting Rusal from the Hong Kong Stock Exchange, the report said.

Sokov added that he would be happy if some of Rusal's large shareholders sold part of their stakes to boost Rusal's free float.

The report noted that Rusal's stake in Norilsk was USD 8.7bn. The item said that En+ holds a 42% stake in Rusal.


Source Newswire Round-up

(MergerMarket) United Technologies hunting 'large scale M&A' tho

United Technologies hunting 'large scale M&A' though good targets scarce

United Technologies (NYSE:UTX) is looking for largmsger acquisitions but sees a dearth of good opportunities, according to CFO Greg Hayes.

During the Q&A session of the Morgan Stanley Laguna conference on Tuesday (16 September), Hayes was asked how he saw the current M&A pipeline.

"Not terribly robust ... We continue to look for opportunities to do large scale M&A. And I make that large scale comment specifically because, at USD 65bn, you've got to do bigger deals to move the needle," he replied.

Hayes noted that the company would continue to do smallish deals on the technology front and on the Otis portfolio side.

"But really the target here is, where can we help move the needle to help us in these two core markets that we operate in on the commercial aerospace side and commercial buildings?" he said.

Hayes explained that for a USD 15bn Aerospace Systems business, it was tougher to do deals, and there were not many engine companies for sale. While he added that there were more opportunities on the commercial side, valuation was an issue because of rising equity prices.

In the face of high multiples, cost synergies were key, Hayes noted.

"We want to find deals where we can generate real hard cost synergies like we did with Goodrich. When you can create value through cost synergies, you can afford to pay some of these multiples that are out there," he said. "USD 500m of synergies on Goodrich creates 5bn of value to the shareowners. We want to find more deals like that, probably not at 18bn, but bigger deals. But I would tell you right now, there's not much in the pipeline of that ilk."

Earlier in the session, as part of a longer reply to a question about share buybacks, the CFO noted the difficulty in bringing back cash from overseas and said the company had over USD 5bn of "trapped foreign cash."

During the first half of 2014, United Technologies spent USD 84m on a number of small acquisitions, primarily in its commercial businesses.

United Technologies has five main business segments: Otis; UTC Climate, Controls & Security; Pratt & Whitney; UTC Aerospace Systems; and Sikorsky. The company refers to Otis and Climate, Controls & Security as its "commercial businesses," while Pratt & Whitney, UTC Aerospace Systems and Sikorsky are the aerospace businesses.

In September 2013, the company formed UTC Building and Industrial Systems, a new organizational structure consisting of Otis and Climate, Controls & Security. Those two businesses continue to report their financial results as separate segments.

The CFO's remarks at this week's conference mostly echoed those from previous months. On the 1Q14 earnings call in April, as this news service reported at the time, Hayes said he did not expect to make any large buys this year but would continue to look.

While United Technologies has used various advisors in recent years for both acquisitions and disposals, Goldman Sachs and Deutsche Bank have been used more than once for sizeable transactions since 2010. For legal, Wachtell, Linklaters, and Cleary Gottlieb have advised on multiple deals during the past few years, according to the Mergermarket M&A database.

Hartford, Connecticut-based United Technologies has a market capitalization of USD 99bn.

>>> What to look at today - 19th of Sept. 2014..NO is sometimes

US closed higher, GBP higher on No Resultu to the referendum in Scotland, As forecasted in a recent press report, Japan govt cut its economic assessment in Sept for the first time in 5 months. Cabinet office pointed to slumping private consumption, which remains both weighed down by the sales tax increase and some rough weather over the past several weeks. Japan also maintained its somewhat cautious assessment for other key components such as
capital spending, exports and industrial output. Separately, Japan PM Abe released an op-ed in the press, claiming structural reforms would continue and hinting at another corporate tax rate cut in 2015. Scotland relief appears to
be driving overall bullish sentiment, resonating in Japan FX and equity trades USD/JPY hit fresh 6-year high above 109.40 (up 70pips), while Nikkei225 was up nearly 2% in early afternoon session at its highest levels since late 2007. China's PBoC put out its Q3 survey of bankers indicating depositors are less willing to apply for mortgages and more respondents expecting home prices to decline. Note that this follows overnight liquidity injection via lower repo
rate offering rate. Barclays economist said that move was meant as a "strong signal of a start of a rate-cutting cycle", but UBS claimed that lower repo rate diminished the possibility of an across-the-board reserve requirement cut. Nikkei +1,48% Hang Seng +0,45% Shanghai +0,24%

Eur$ 1,2908 S&P +0,38% Eurostoxx +1,08% FTSE _1,11% Dax +0,8% SMI +0,4%


Macro
- *SCOTLAND VOTES 55.4% NO, 44.6% YES WITH 31 OF 32 COUNTED
- ECB Eyes Banks’ Capital Quality as Target for Supervisory Power
- Shinzo Abe in WSJ Op-Ed Says Next Stage of Abenomics Is Coming
- U.S. Drilling to Slow If Price Falls Further: Standard Chartered

Keep an eye on :
- ALO FP : RWE, Alstom in Dispute Over Delayed Coal Plant, Echos Says
- BABA US : Alibaba Said to Price Shares at $68 Each in IPO
- BELG BB : Belgacom, Voo in Talks With Netflix on Streaming: L’Echo Link
- FUM1V FH : Fortum Delays Restart of 496MW Loviisa-2 Nuclear Reactor
- HEIA GY : Heineken CFO Hooft Graafland to Retire in 2015, FD Reports
- ISP IM : Intesa Plans to Use EU4b TLTRO for Lending, CEO Tells Sole
- PTC PL : Portugal Telecom Names Joao Manuel De Mello Franco Chairman
- SAP GY : SAP to Buy Concur for $129/Shr (CNQR US) , or Enterprise Value $8.3b (10,7% premium), traded higer after mkt
- TFI FP : Le Figaro Says It’s Studying TF1’s LCI Channel
- VIV FP : Vivendi Signs Accord to Sell GVT to Telefonica for EU4.66b Cash, Vivendi Reaches GVT Pact, to Get 5.7% of Telecom Italia

>>> Brokers Upgrades & Downgrades

>>> Up
*AIXTRON RAISED TO BUY VS HOLD AT BERENBERG
*DEUTSCHE TELEKOM RAISED TO BUY VS NEUTRAL AT CITI
*E.ON RAISED TO HOLD VS SELL AT BERENBERG
*EVRAZ RAISED TO NEUTRAL VS SELL AT GOLDMAN
*NLMK RAISED TO NEUTRAL VS SELL AT GOLDMAN
*SABMILLER RAISED TO NEUTRAL VS REDUCE AT NOMURA
*VERBUND RAISED TO BUY VS SELL AT BERENBERG

>>> Down
*ASOS CUT TO NEUTRAL VS BUY AT BOFAML
*GDF SUEZ CUT TO HOLD VS BUY AT BERENBERG
*HEIDELBERGCEMENT CUT TO SELL VS NEUTRAL AT UBS
*RASPADSKAYA CUT TO SELL VS NEUTRAL AT GOLDMAN


>>> PT Changes


>>> Initiation
*KONTRON REINITIATED AT BUY AT BERENBERG; PT EU6.8
*MICHELIN RATED NEW BUY AT BERENBERG; PT EU95
*NOKIAN RENKAAT RATED NEW HOLD AT BERENBERG; PT EU26.5
*PIRELLI RATED NEW BUY AT BERENBERG; PT EU14.5
*SEVERSTAL REINSTATED BUY AT GOLDMAN

>>> Call
*ALROSA REMOVED FROM GOLDMAN CEEMEA FOCUS LIST, RATES BUY

>>> Asian Update

Asian Market Update: Japan govt cuts economic assessment; NO camp prevailing in Scotland independence vote

***Economic Data*** - (NZ) NEW ZEALAND AUG NET MIGRATION: 4.7K V 4.5K; New 11-year high - (NZ) NEW ZEALAND AUG ANZ JOB ADS M/M: +1.4 V -2.4% PRIOR - (NZ) NEW ZEALAND SEPT ANZ CONSUMER CONFIDENCE INDEX: 127.7 V 125.5 PRIOR - (KR) SOUTH KOREA AUG PPI Y/Y: -0.2% V +0.2% PRIOR (first decline in 4 months) - (US) NORTH AMERICA AUG SEMI BOOK/BILL RATIO: 1.04 V 1.07 PRIOR (3rd consecutive month above parity)

***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 +1.5%, S&P/ASX +0.2%, Kospi +0.6%, Shanghai -0.2%, Composite -0.2%, Hang Seng +0.1%, Dec S&P500 +0.3% at 2,010

***Commodities/Fixed Income/Currencies*** - Dec gold -0.3% at $1,223/oz, Oct crude oil -0.1% at $92.96/brl, Dec copper flat at $3.09/lb - (JP) BOJ offers to buy ¥110B in JGB with maturity below 1-yr, ¥300B in 1-3yr JGB and ¥200B in 3-5yr JGB as well as 1.8T in T-bills - (JP) Japan investors sold net ¥401.1B in foreign bonds v bought ¥770.1B in prior week; Foreign Investors bought net ¥136.8B in Japan stocks v bought ¥187.9B in prior week - (AU) Australia MoF (AOFM) sells A$600M in 3.25% 2018 bonds; Avg yield: 3.0681%; Bid-to-cover: 4.01x - Weekly Fed Balance Sheet Total Assets for week ending Sept 17th: $4.45T v $4.42T prior; M1 y/y change: 11.2% v 11.3% w/w; M2 y/y change: 6.6% v 6.6% w/w

***Market Focal Points/Key Themes*** - Sterling is marching higher as the Scotland referendum is past its halfway point. With 24 out of 32 councils the No camp is winning by 54% to 46% margin, and analysts project a very likely victory for the loyalist side. GBP/USD has tested the upside of $1.65 (2-week high), up over 100pips from the start of the session, and EUR/GBP fell to a 2-year low below 0.7820.

- As forecasted in a recent press report, Japan govt cut its economic assessment in Sept for the first time in 5 months. Cabinet office pointed to slumping private consumption, which remains both weighed down by the sales tax increase and some rough weather over the past several weeks. Japan also maintained its somewhat cautious assessment for other key components such as capital spending, exports and industrial output. Separately, Japan PM Abe released an op-ed in the press, claiming structural reforms would continue and hinting at another corporate tax rate cut in 2015. Scotland relief appears to be driving overall bullish sentiment, resonating in Japan FX and equity trades. USD/JPY hit fresh 6-year high above 109.40 (up 70pips), while Nikkei225 is up nearly 2% in early afternoon session at its highest levels since late 2007.

- China's PBoC put out its Q3 survey of bankers indicating depositors are less willing to apply for mortgages and more respondents expecting home prices to decline. Note that this follows overnight liquidity injection via lower repo rate offering rate. Barclays economist said that move was meant as a "strong signal of a start of a rate-cutting cycle", but UBS claimed that lower repo rate diminished the possibility of an across-the-board reserve requirement cut.

***Equities*** US markets: - CNQR: To be acquired by SAP for $129/shr; deal valued at $8.3B; +19.4% afterhours - MCD: Raises quarterly dividend by 5% to $0.85/shr from $0.81; +0.5% afterhours - LMT: Said to be close to securing a new $4B contract with DoD; Aims to cut costs by 2-4% in the next F-35 contract - financial press; +0.2% afterhours - HD: Q3 sales "on plan"; Announces completed malware elimination and enhanced encryption of payment data in all US; Guides FY14 EPS higher to $4.54 (including items, incl charges and gains) v $4.49e (prior $4.52); Affirms Rev growth +4.8%; +0.1% afterhours - ORCL: Reports Q1 $0.62 v $0.64e, R$8.60B v $8.78Be; authorized repurchase of up to additional $13.0B of common stock (7.0% of market cap); Guides Q2 Non-GAAP $0.68-0.72 v $0.74e (constant currency), Rev +2-6% (constant currency) - conf call; Names President Mark Hurd and Safra Catz as CEOs; Ellison to Exec Chairman and CTO, effective immediately; -1.8% afterhours - VMI: Lowers FY14 EPS guidance to $8.70-8.90 v $9.50e ($9.35-9.65 prior); -2.3% afterhours - RHT: Reports Q2 $0.41 v $0.38e, R$445.9M v $435Me; Guides Q3 $0.40 v $0.40e, R$449-452M v $455Me; Raises FY15 $1.53-1.55 v $1.53e, R$1.770-1.785B v $1.78Be - conf call; -3.1% afterhours

- BABA: PRICES IPO AT $68/SHR AT THE HIGH END OF $66-68 RANGE (in line with earlier forecast)

Notable movers by sector: - Consumer Discretionary: Fast Retailing 9983.JP +3.5% (sees profit in US business); Qantas Airways QAN.AU -1.4% (shareholder lowers stake; block trade); Sands China 1928.HK +1.7%, Wynn Macau 1128.HK +4.8%, MGM China 2282.HK +3.2% (momentum in Macau casinos) - Consumer staples: Blackcow Food 002387.CN +4.6% (private placement plan) - Materials: Sirius Resources SIR.AU +2.8% (JCP Investment initiates stake) - Energy: AWE Ltd AWE.AU +3.4% (shareholder raises stake)

(BFW) Lew Says Work Needed for Safer, Sounder Financial System

BFW 09/19 02:40 *LEW SAYS TREASURY PREPARED TO TAKE ACTION ON INVERSIONS
BFW 09/19 02:40 *U.S. NEEDS BUSINESS TAX REFORM, LEW SAYS
BN 09/19 02:40 *U.S. NEEDS BUSINESS TAX REFORM, LEW SAYS
BN 09/19 02:40 *U.S. TREASURY CHIEF JACOB LEW COMMENTS IN STATEMENT AT G-20
BN 09/19 02:40 *LEW SAYS 'MORE WORK NEEDED' FOR FASTER GLOBAL GROWTH
BN 09/19 02:40 *LEW SAYS WORK NEEDED FOR SAFER, SOUNDER FINANCIAL SYSTEM
BN 09/19 02:40 *LEW SAYS TREASURY PREPARED TO TAKE ACTION ON INVERSIONS
BN 09/19 02:40 *LEW SAYS FSB MADE PROGRESS ON LOSS-ABSORBING CAPACITY
BN 09/19 02:40 *LEW: PUBLIC, PRIVATE INVESTMENT KEY TO BOOSTING GROWTH
Lew Says Work Needed for Safer, Sounder Financial System
2014-09-19 02:51:08.280 GMT


By Ian Katz
Sept. 19 (Bloomberg) -- Remarks of Treasury Secretary Jacob
Lew at the G-20.
* Global economy continues to underperform
* More work needed to achieve faster, more balanced growth
* Welcome progress made by FSB, and emerging consensus on a
total loss absorbing capacity proposal
* Important work being done to level playing field by helping
combat tax evasion and tax avoidance by MNCs
* In the U.S., we need business tax reform with anti-inversion
provisions to close loopholes and make tax system more
competitive
* NOTE: EU to Urge G-20 Action on Global Banks’ Loss-Absorbing
Capacity {NSN NC3RYP6K50Y0 <go>}
* NOTE: Biggest Economies Plan to Keep G-20 Growth Pledge,
Official Says {NSN NC3PWK6S972E <go>}


For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}

To contact the reporter on this story:
Ian Katz in Washington at +1-202-624-1827 or
ikatz2@bloomberg.net

To contact the editor responsible for this story:
Rina Chandran at +65-6311-2417 or
rchandran12@bloomberg.net

(BFW) Vivendi Reaches GVT Pact, to Get 5.7% of Telecom Italia

BN 09/19 05:36 Telefonica Agrees to Buy Vivendi’s GVT After Weeks of Talks
BFW 09/19 05:24 Vivendi Signs Accord to Sell GVT to Telefonica for EU4.66b Cash
BN 09/19 05:27 *VIVENDI SAYS TELEFONICA BRASIL SHARES HAVE VALUE OF EU2B
BN 09/19 05:26 *VIVENDI WILL GET 5.7% OF TELECOM ITALIA, VALUED AT EU1B
BN 09/19 05:25 *VIVENDI SEES CLOSING BY END OF 1H 2015
BN 09/19 05:25 *VIVENDI SAYS ACCORD NEEDS BRAZILIAN REGULATORY APPROVALS
BN 09/19 05:24 *VIVENDI WILL GET 7.4% OF TELEFONICA BRAZIL SHARES
BN 09/19 05:24 *VIVENDI ESTIMATES CAPITAL GAINS TAX AT EU500M
BN 09/19 05:23 *VIVENDI SIGNS ACCORD TO SELL GVT TO TELEFONICA FOR EU4.66B CASH
BN 09/19 05:22 *VIVENDI SAYS ACCORD SIGNED SEPT 18
BN 09/19 05:22 *VIVENDI REACHES ACCORD WITH TELEFONICA ON GVT
MORE: Vivendi Reaches GVT Pact, to Get 5.7% of Telecom Italia
2014-09-19 05:32:28.931 GMT


By Gaurav Panchal
Sept. 19 (Bloomberg) -- Vivendi signs accord to sell GVT to
Telefonica for EU4.66b cash.
* Agreement, signed on Sep. 18, includes EU4.66b cash payment,
from which a bank debt of ~EU450m and adjustments in working
capital will be deducted
* Vivendi will also receive 7.4% of Telefonica Brasil
shares, at market value of EU2.02b, 5.7% of Telecom
Italia shares at market value of EU1.01b
* Vivendi will also be liable for tax (including on capital
gains) estimated today at ~EU500m
* Final agreement subject to certain conditions, including
approval by relevant regulatory authorities, notably Anatel
(Telecommunications) and Cade (Competition) in Brazil.
* Closing of transaction expected before 1H end in 2015
* Statement: {NSN NC4V960R5NAA <go>}

Link to Company News:{VIV FP <Equity> CN <GO>}
Link to Company News:{TIT IM <Equity> CN <GO>}
Link to Company News:{TEF SM <Equity> CN <GO>}

For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}

To contact the editor responsible for this story:
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gpanchal2@bloomberg.net

>>> Lafarge/Holcim divests attract CRH along with private equity

Lafarge/Holcim divests attract CRH along with private equity

Lafarge [EPA:LG] and Holcim's [OTCMKTS:HCMLY] planned divestments to clear the way for their major merger are being eyed by Ireland's CRH [NYSE:CRH] and four private equity consortia, according to a newswire report.

The Reuters item said bids being considered for the assets range from EUR 5bn to EUR 7bn (USD 6.5bn-USD 9bn), citing sources familiar with the matter.

This news service reported earlier this week that in terms of potential bidders, CVC has joined forces with the Singaporean sovereign wealth fund GIC; BC Partners has teamed up with Advent International; and Cinven has teamed with Blackstone and CPPIB.

The newswire reported that CVC's consortium includes three other partners and that a fourth group has formed between Bain, Onex, and one more limited partner.

The Mergermarket Group, publisher of this news service, is a BC Partners portfolio firm.

An information memorandum was due to be released at the start of this week, this news service also reported. Besides disposals in Canada, Mauritius, the Philippines, and Brazil, Holcim's assets in Hungary and Serbia and Lafarge's in Romania are also included.

In western Europe, Lafarge's Mannersdorf cement plant in Austria and its German assets, much of both firms' holdings in France, and the UK's Lafarge Tarmac assets except for possibly one plant will go on the block.

EBITDA for the divisions combined comes to EUR 750m-EUR 850m, sources told this news service.

CRH's new CEO Albert Manifold has said the potential purchase of the Lafarge-Holcim assets would not interfere with the Irish firm's own plans to sell EUR 1.5bn-EUR 2bn worth of assets. There would be little overlap in CRH's sale of smaller subsidiaries and the large cement operations that Lafarge and Holcim are selling, he said. In May, the executive said CRH had EUR 1.5bn in M&A capacity going forward.

Source Newswire Round-up