- Campbell Soup has tapped Goldman Sachs to look at selling some of its business units to help pay down debt, people familiar with the situation tell CNBC.
- Its March acquisition of pretzel maker Snyder's more than tripled Campbell's debt burden to $9.6 billion.
- The review comes as Campbell's faces pressure to share from activist investor Third Point
article saying that earlier :
WASHINGTON (AFP, BLOOMBERG) - Chinese bombers are likely training for strikes against United States and allied targets in the Pacific, according to a new Pentagon report that also details how Beijing is transforming its ground forces to "fight and win".
The annual report to Congress, released on Thursday (Aug 16), highlights China's growing military, economic and diplomatic clout, and how Beijing is leveraging this to rapidly build its international footprint and establish regional dominance.
In the case of China's air power, the report states that Chinese bombers are developing capabilities to hit targets as far from China as possible.
"Over the last three years, the PLA (People's Liberation Army) has rapidly expanded its overwater bomber operating areas, gaining experience in critical maritime regions and likely training for strikes against US and allied targets," the document states, noting how China is pushing its operations out into the Pacific.
In August 2017, six Chinese H-6K bombers flew through the Miyako Strait, south-west of the Japanese islands, and then for the first time, turned north to fly east of Okinawa, where 47,000 US troops are based.
The PLA may demonstrate the "capability to strike US and allied forces and military bases in the western Pacific Ocean, including Guam," the report says.
'NUCLEAR ELEMENT'
The Pentagon report also sounded a warning over China’s plans to introduce floating nuclear power plants on disputed islands and reefs in the South China Sea.
“China’s plans to power these islands may add a nuclear element to the territorial dispute,” the Pentagon said in the report titled “Military and Security Developments Involving the People’s Republic of China.”
“China indicated development plans may be underway to power islands and reefs in the typhoon-prone South China Sea with floating nuclear power stations; development reportedly is to begin prior to 2020.”
The China Securities Journal – a Chinese state-run financial newspaper – said in 2016 that China could build as many as 20 floating nuclear plants to “speed up the commercial development” of the South China Sea, the South China Morning Post reported last year.
Several Chinese state-run companies last year established a joint venture that aims to strengthen China’s nuclear power capabilities in line with its ambitions to “become a strong maritime power,” the Post said, citing a statement released by the venture.
Beijing claims more than 80 per cent of the South China Sea, which carries around US$3.4 trillion worth of global trade each year. Five other countries – including the Philippines and Vietnam – also have claims in the waters, which have led to clashes over fishing rights and energy exploration.
US-China military ties have deteriorated of late, with the Trump administration in May revoking an invitation for Beijing to join in Pacific naval exercises due to its activities in disputed parts of the sea. China has reclaimed 3,200 of acres of land in the Spratly Island chain and added with ports, runways and other military infrastructure.
LARGEST GROUND FORCE
China is engaged in a decades-long build-up and modernisation of its once-backward armed forces, and military leaders have set a goal of fielding a world-class military by 2050.
President Xi Jinping last year ordered the PLA to step up efforts, saying China needed a military ready to "fight and win" wars.
The call has alarmed China's neighbours, several of whom are embroiled in tense border disputes with the superpower.
According to the Pentagon, the PLA in April 2017 undertook a massive transformation of operational and tactical units as part of its structural reforms.
With nearly a million troops, the PLA is the largest standing ground force in the world.
"The purpose of these reforms is to create a more mobile, modular, lethal ground force capable of being the core of joint operations and able to meet Xi Jinping's directive to 'fight and win wars,'" the Pentagon report notes.
China's military budget for 2017 was about US$190 billion (S$260 billion), according to the report, far behind the Pentagon's annual budget of about US$700 billion.
When the Pentagon released its annual report last year, Beijing dismissed it as "irresponsible" in predicting that China would expand its global military presence by building overseas bases in countries like Pakistan.
This year's report reiterates that China will seek to establish new bases in such countries.
Key to this expanding footprint is China's "Belt and Road" initiative that seeks to bolster ties with other nations through lending and infrastructure deals.
TAIWAN 'CONTINGENCY'
The document also shines a light on China's ongoing military preparations for a "contingency" in the Taiwan Strait.
Officially, China advocates for a peaceful reunification with Taiwan, but it has never repudiated the use of military force, the document notes.
"The PLA also is likely preparing for a contingency to unify Taiwan with China by force, while simultaneously deterring, delaying, or denying any third-party intervention on Taiwan's behalf," it states.
"Should the United States intervene, China would try to delay effective intervention and seek victory in a high-intensity, limited war of short duration."
In addition, to the ire of regional neighbours, China has built a series of islets and ocean features into military facilities in the South China Sea.
Beijing has now stopped substantial land reclamation.
"However, it continued to build infrastructure at three outposts," the report says.
as US is saying :
https://www.wsj.com/articles/pompeo-announces-new-action-group-to-target-iran-1534445395
U.S. Signals It Could Sanction China Over Iran Oil Imports
Secretary of state says U.S. strategy aims to change Tehran’s behavior
https://www.wsj.com/articles/pompeo-announces-new-action-group-to-target-iran-1534445395
Maersk/conglomerates: driller killer
Spinning off oil rigs business will allow the group to sail more smoothly
Some businesses are diversified. Others are focused. Most sit somewhere between the two. AP Moller-Maersk, an ocean-going Danish conglomerate, will migrate towards the obsessive end of the spectrum by spinning off an oil rigs business next year. Is it right to do so?
There is thematic consistency in teaming a shipping line with a drilling contractor and an oil company. All rely on the seafaring skills that won foreign dominions for the Vikings and a business empire for the Moller family.
Diversification reduces the volatility of earnings and of share prices. Brokers and fund managers espouse focus partly because they earn fees for assembling balanced portfolios.
However, a controlling family trust is behind the break-up of Maersk rather than financial fly-by-nights. It will be left with roughly the same exposure to three main industries. So will minority shareholders who hold on.
In March, the company sold Maersk Oil to Total of France for $7.5bn in cash and shares. Owning an energy business was meant to hedge against the fuel costs of the shipping division. The disposal signalled that the owners valued this less than corporate clarity.
The drilling business, which makes holes in the seabed for oil companies, looks as if it would amplify volatility rather than the reverse. Trade buyers have spurned it. True, profits should surge when the oil price is strong. But earnings are prone to collapse when the oil price is weak. Seadrill, another rigs business, has only just relisted its shares after a spell in Chapter 11 bankruptcy.
UBS ascribed an enterprise value of about $4.8bn to Maersk Drilling earlier this year. That suggests an equity worth about $3.6bn. This would be stingy in comparison with implied earnings of about $600m for 2018, but generous measured against a 2017 loss of $1.5bn. Maersk will sail more smoothly without this shifting ballast.
Does Tencent Music Deserve a Spotify-Like Valuation?
hina tech IPOs, of companies such as Xiaomi and Pinduoduo, have struggled this year. That puts the spotlight on the next big U.S. public offering from China, which is likely to be Tencent Music Entertainment Group, China’s answer to Spotify. Its valuation has soared on private tech markets lately, suggesting that investors anticipate its IPO could prove as successful as Spotify’s public listing in April. It’s a riskier bet than Spotify, but could pay off hugely.
U.S. investors have recently agreed to buy private stock in Tencent Music from earlier shareholders at a valuation between $28 billion and $30 billion, according to four people familiar with the matter. That’s up from $11.5 billion in December. And it suggests Tencent Music is worth nearly as much as Spotify—whose market capitalization on Thursday was $34.6 billion, up 30% since the listing.
PZZA US - Hearing M&A blog revives speculation about PZZA talks with Wendy's
Campbell taps Goldman to examine sales of business units to pay down debt
How Campbell Soup fell off its perch 2:02 PM ET Sat, 28 July 2018 | 04:16
Campbell Soup has tapped investment bank Goldman Sachs to look at the possibility of selling off some of its businesses to help pay down debt left in the wake of its $6.1 billion acquisition of pretzel maker Snyder's Lance earlier this year, people familiar with the review tell CNBC.
Goldman joins a coterie of other advisers, including management consulting firm Deloitte and investment bank Centerview Partners, to advise on a "thorough and critical" review of Campbell's operations and holdings the food company announced this spring. Goldman, like Centerview, has a history with the company, having worked closely with previous CEO Douglas Conant.
Its March acquisition of Snyder's more than tripled Campbell's debt burden — to $9.6 billion at the end of the most recent quarter, from $3.1 billion a year earlier. Ratings company Moody's Investors Service cited Campbell's high leverage ratio as a problem and questioned its ability to pay down that debt when it placed its bonds on review for a possible downgrade in May. Snyder's, which makes its famed Snyder's of Hanover pretzels, also makes Cape Cod and Kettle potato chips, among other popular snack food.
The soup giant is weighing the sale of Australian cookie brand, Arnotts Biscuits and its fresh food unit, which includes carrot and smoothie brand Bolthouse Farms, said the people, who asked not to be identified because the review is private.
The company is still evaluating a number of options to shore up its balance sheet and hasn't made a formal decision yet.
A sale of the units would follow suit of a number Big Food peers have been slimming down as their market dominance is threatened by smaller, nimble upstart brands. Slimming down also paves the way for more precise deal-making, with most of today's growth driven by brands that are, for consumer giants, below scale. Company executives recently told investors that reducing debt was a high priority following the Snyder's acquisition.
The company's weak financial position has drawn attention from activist investors who are pressuring the 149-year-old soup maker to sell. The potential divestitures are likely to do little to appease Dan Loeb's Third Point, which recently disclosed a 5.65 percent stake in the company and called a sale of the business the "only justifiable outcome" of its review. The activist is teaming up with shareholder George Strawbridge, a family member of the founder, to call for the sale.
Selling Bolthouse Farms and Campbell's other fresh-foods businesses to help pay down debt would also mark the undoing of a strategy heralded by former CEO Denise Morrison to invest the cash-flow from its profitable yet laggard soup business into trendier foods. The soup company, though, stumbled with its lack of experience managing fresh food, challenges exacerbated by a California drought.
The fresh business unit is now clocking a loss of roughly $50 million, down from a $150 million gain, people familiar with the results have told CNBC.
Campbell announced the surprise departure of Morrison this spring, after it disclosed "unacceptable" earnings and announced the review.
The potential divestitures highlight the bind Big Food brands are inas they are forced to pay big prices to buy the few companies that are both growing and big enough to make a dent. For Campbell, its acquisition of Snyder's — its largest yet — was one further attempt to offset of the decline of its soup business. Campbell introduced condensed soup to the U.S. and for years profited from its ability to cheaply churn out its iconic cans. It has been unable, though, to adapt its products to appeal to today's focus on fresh and healthy food.
Campbell's soup business over the past year declined 1.9 percent.
Campbell spokesman Thomas Hushen reiterated the company's previous statement, saying that the board is conducting a "comprehensive strategic and operational review of the business, including the composition of its entire portfolio, to examine all potential paths forward" and will announce its decision on Aug. 30 when it reports fiscal fourth-quarter results.
"In the interim, we will not speculate on the result of the review," he said.
Goldman Sachs spokeswoman Leslie Shribman declined to comment.