Fidest – Agenzia giornalistica/press agency

Quotidiano di informazione – Anno 31 n° 259

Posts Tagged ‘john colley’

Expert comment on the LSE saying its merger with Deutsche Boerse could lead to 1,250 job losses

Posted by fidest press agency su venerdì, 3 giugno 2016

Warwick_Business_School_Scarman_road_viewIf you are looking for expert comment on the LSE saying its merger with Deutsche Boerse could lead to 1,250 job losses John Colley, of Warwick Business School, is a Professor of Practice in the Strategy & International Group and researches large takeovers. He is also a former MD of a FTSE 100 company that was involved in a hostile takeover.Professor John Colley said: “The announcement does not indicate where the job losses will fall, suggesting they will be spread between the businesses. There is concern that the bulk may fall in London as redundancies will be cheaper there than in Germany. Secondly there is some scepticism as to whether this is truly a ‘merger of equals’ or a German takeover. No doubt this will become clearer with time. “Some would say that the LSE and Deutsche Boerse are ‘jumping the gun’ by announcing up to 1,250 job losses or 14% of the workforce, as part of the €450 million savings from the €30 billion merger. “The announcement suggests they do mean business, but it could look impetuous if the European Commission objects to the tie-up. This remains a possibility as there are plenty of competition concerns and, indeed, political sensitivities to the ‘merger of equals’. Treatment of the two clearing houses, LCH.Clearnet and Eurex, is bound to be an issue and the EC is likely to require some assurances around them remaining separate. Otherwise a merger may be viewed as ‘too big to fail’.”The announcement does strongly suggest that shareholder consultation on both sides points to clear support for the merger. Shareholders will not be an impediment to the deal.”Advisor fees on the friendly merger are a staggering €307 million, the bulk of which have been incurred by the LSE. These do seem excessive in view of the limited nature of the necessary work.”There are €160 million of revenue benefits although there is scepticism from many as to whether these are achievable. The combination will be bigger than the two major US exchange networks, ICE and Nasdaq.”

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Expert comment on Bayer making a takeover offer for Monsanto

Posted by fidest press agency su venerdì, 20 maggio 2016

warwick_campus_2_largeJohn Colley, of Warwick Business School, is a Professor of Practice in the Strategy & International Business Group and researches large takeovers. He is also a former MD of a FTSE 100 company.Professor John Colley said: “Monsanto certainly do not want to be bought by a European business. However, shareholders always have their price. No doubt Monsanto will reject the bid, but it will need to convince its shareholders that it has seriously considered the offer. A higher bid is likely. “Demand is poor for agribusiness products currently due to low commodity prices. Overcapacity has led to poor performance and lower share prices, in turn providing opportunities for mergers. Industry rationalisation has been progressing already with the Du Pont Dow Chemicals deal, which will no doubt result in reduced capacity and significant cost savings.”Concentration in the chemicals agribusiness industry continues with Bayer’s $40 billion bid for Monsanto. Monsanto has put itself in play after its bid for Syngenta, which went to ChemChina for $44 billion. This was followed by an approach to buy parts of Bayer.”

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Expert comment on Three’s takeover of O2 being blocked by the EU

Posted by fidest press agency su giovedì, 12 maggio 2016

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John Colley, is a Professor of Practice in the Strategy and International Business group and researches large takeovers. He is also a former MD of a FTSE 100 company. Professor John Colley said: “It comes as little surprise that the EU competition authorities have said enough is enough on the rapid concentration of the UK mobile telecoms sector. “Following the merger of T-Mobile with Orange, subsequently purchased by BT, the industry was reduced to four players. The proposed merger of Three with O2 would have made it three players and the evidence from markets elsewhere shows that three players results in higher prices for consumers compared to four. In effect competition reduces and the consumer pays the price for that. “It is clear that the merger would have substantially reduced costs in requiring less shops, marketing, administration, head offices and there would have been benefits in terms of reduced network operating costs. However, the reduced competition would have meant that Three/O2 would not have to pass those savings on to the consumer.”

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AB InBev results – what do they mean for the brewer

Posted by fidest press agency su giovedì, 5 maggio 2016

John Colley, a Professor of Practice at Warwick_Business_School_Scarman_road_view who researches mega mergers such as that between AB InBev and SABMiller, has made the following statement:”Beer volumes and earnings both suffered in the first quarter as AB InBev demonstrated why it needs the SABMiller acquisition. Overall beer volumes were down 1.4% and earnings declined due to currency and increased expenses.
“SABMiller will provide growth markets in Africa and South America. AB InBev seem willing to readily part company with acquired brands in the mature markets of North America, Europe and China to appease competition authorities. Whilst AB InBev offers reassurance that the acquisition is on track for the second half of the year there may still be more demands from competition authorities to be met.”If you look at the numbers, volumes declined by 1.2% in the USA partly as a consequence of lost market share.”Brazil beer volumes declined 10% resulting from the economic turmoil there. Chinese volumes also declined by 1.1% as AB InBev remains under pressure.
“However a major positive was the 13% increase in Mexican volumes partly as a response to increased marketing investment. Overall pressure on volumes in difficult and mature markets has resulted in AB InBev increasing selling and marketing expenses by 13.5% to counteract the lack of growth.”AB InBev, despite the decline in earnings, continues to dominate the global beer industry with margins way ahead of their competitors. Following the SABMiller acquisition they will be almost six times the size of the next biggest brewer Heineken.”Unrivalled scale and scope economies together with market power and strong distribution channels and an ability to deliver on acquisitions makes them a formidable business. However further acquisitions in the beer industry may be difficult due to competition issues.”

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Expert comment on AB InBev’s plan to sell SABMiller’s central and eastern European businesses

Posted by fidest press agency su martedì, 3 maggio 2016

John Colley, of warwick_campus_2_large, is a Professor of Practice and researches large takeovers. He is also a former MD of a FTSE 100 company. Professor John Colley said: “Competition authority negotiations to win approval for AB InBev’s deal with SABMiller are continuing to take their toll. One major brand included in the latest sale is Pilsner Urquell and its worldwide rights outside the US. Japan’s Asahi might be a possible suitor following their acquisition of Grolsch and Peroni. Within the US Pilsner Urquell is going to Molson Coors as further efforts are made to gain competition authority approvals.”In North America, while MillerCoors has been sold to Molson Coors, there are continuing concerns from anti-trust authorities about control of distribution and AB InBev’s ability to prevent craft beers reaching drinkers. After the disposal of Miller AB InBev still has 45% of the US beer market. It is vertically integrated into wholesalers and many of the others represent AB InBev exclusively. One senses the game is not over either in the US or Europe and that further restrictions will be imposed. “AB InBev’s enormous market shares, post the SABMiller bid, have resulted in major disposals in the US, Europe, and China together with worldwide rights to a number of brands such as Grolsch, Peroni, Miller and now Pilsner Urquell. The main objective of the deal is stronger growth positions in Africa and Latin America. However, the extent of divestments elsewhere needed for competition authority approvals, is continuing to grow.”

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Expert comment: SAB Miller’s Q4 results show they why they became $106Bn target for AB InBev

Posted by fidest press agency su venerdì, 22 aprile 2016

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Expert comment on SABMiller’s fourth quarter results. John Colley, a Professor of Practice at Warwick Business School who researches mega mergers, has made the following statement:”SABMiller’s fourth quarter results have fully demonstrated the reasons why they became a $106Bn target for AB InBev. Volume growth in Latin America was 5% with Colombia hitting 8% whilst African volume growth was 6% over the year.”AB InBev had been struggling for growth in the USA and Europe where beer markets are stagnant to declining with craft beers making substantial inroads.”Overall SABMiller showed a similar pattern failing to grow in Europe over the year and registering a 1% volume decline in USA. However SABMiller’s strong positions in the growth markets of Africa and Latin America made them a target. “The results, whilst currency affected, are particularly positive in view of the major distraction defending the AB InBev bid would have been over the latter part of the year. The deal is expected to close during the second half of 2016.”

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Expert Comment: Peroni and Grolsch brands sold by AB InBev to Asahi

Posted by fidest press agency su mercoledì, 20 aprile 2016

The expert comment on the finalised acquisition of the Peroni and Grolsch brands by Asahi. Te expert is John Colley, a Professor of Practice at Warwick Business School who has extensively researched mega mergers, has made the following statement: “This deal suggests the merger with SABMiller is close to closing and that they believe they will soon get the necessary regulatory approvals particularly in US, Europe and China. The real prize is stronger positions in Africa and Latin America which are the future growth markets for beer. Elsewhere demand is largely flat. “The deal has come at a high cost with substantial forced disposals in addition to the $106Bn needed to convince SABMiller’s shareholders. Assets sold to allay competition fears include worldwide rights to the Miller brands which went to MolsonCoors, Snow brand to China Resources Enterprise, and now Peroni and Grolsch to Asahi of Japan. “The speed at which the deal has been done demonstrates the determination of AB InBev to complete on the SABMiller deal. This will give them almost 30% of the global beer market. It does mean that the merger will make AB InBev by far the world’s biggest brewer with Carlsberg and Heineken a long way back. Unfortunately, it is difficult to see how this level of concentration will be in the beer drinkers’ best interests. “However the overall price of the deal and the extent of necessary disposals suggests that AB InBev’s shareholders may not benefit either.”Asahi is the biggest Japanese brewer with 38% of the market but little outside Japan. Clearly this signals global ambitions for Asahi as it will give them a strong position in many developed markets. “Access to distribution through these two premium brands and relatively local brewing will mean that Asahi’s own range of Super Dry ales can be introduced to wide distribution. This is at least good news for the beer drinker as it may well lead to more choice and more competition.”

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Expert comment on Orange and Bouygues Telecom merger collapsing

Posted by fidest press agency su martedì, 5 aprile 2016

Warwick. Expert comment on Orange and Bouygues Telecom merger collapsing John Colley, of Warwick Business School. John Colley is a Professor of Practice in the Startegy and International Business Group and researches large mergers. He is also a former managing director of a FTSE 100 company.
Professor John Colley said: “Margins have been struggling in the French telecom market and the merger of Orange with Bouygues was intended to address that. Research from other telecom markets finds that three players have higher prices and lower costs than four. This is no surprise as there are less competitors to compete with and fewer shops, masts, plus less advertising, administration and management.”It is unclear why the deal collapsed and it seems that Bouygues’ directors would lose out in the resulting allocation of jobs. However, clarity over leadership would have reduced execution risk. Undoubtedly competition authorities would be involved as the combined market share of Bouygues and Orange would have been almost 50%, well above the interest threshold. Typically in the telecoms industry the largest player is the most profitable as they enjoy the highest call volumes and customer numbers through what is a fixed cost structure.”But Bouygues is now in play so expect Altice to come back with a second bid, which Bouygues may struggle to reject this time. Bouygues’ shares are down 15% already, which makes a bid from Altice look more attractive than last time.”

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Expert comment on the proposed London Stock Exchange Group and Deutsche Boerse

Posted by fidest press agency su giovedì, 17 marzo 2016

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John Colley, professor of Warwich Business school comment on the proposed London Stock Exchange Group and Deutsche Boerse merger. John Colley is a Professor of Practice, a former MD of a FTSE 100 company and researches large mergers and takeovers. Professor John Colley said: “The savings seem rather meagre in a merger which appears to be designed to avoid upsetting staff, directors and, indeed, competition authorities.”The real issue is achieving scale to compete on a global scale against already consolidated opponents. Europe needs a strong champion to compete against the US exchanges and Hong Kong. However, competition authorities remain to be convinced of this argument. In the past European competition authorities have tended to see such mergers at a European level. The issue this time may also be the complications of a possible Brexit.”While promoted as a ‘merger of equals’ with top jobs respectively filled by a balance of directors from both businesses, in practice such arrangements rarely work. The chairman is from the LSE, while the deputy chairman and chief executive are from Deutsche Boerse. ‘Mergers of equals’ usually result in a lack of clarity in direction and leadership as both camps jockey for influence. A result is a confused structure and a failure to drive cost savings opportunities arising from the merger. However, this may well not be quite as the financial PR suggests, as there are a number of interests to satisfy.”Currently the most likely intervention will come from the US network of exchanges and clearing houses, Intercontinental Exchange (ICE), lead by founder and president Jeffrey Sprecher. However, the current approach of the LSE and Deutsche Boerse may not be aggressive enough to see off Sprecher’s unwanted attention.”

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Expert comment: Proposed Merger of LSE and Deutsche Borse

Posted by fidest press agency su giovedì, 10 marzo 2016

borsaExpert comment on the proposed Merger of LSE and Deutsche Borse, John Colley, Professor of Practice at Warwick Business School and an expert on mega mergers, has made the following statement: “After an initial announcement last week, stock exchange boards in Frankfurt and London are currently working on how to make the proposed merger of Europe’s leading stock exchanges more attractive to shareholders as potential bidders wait in the wings. So far the benefits are being aired as £250M of administration savings, mainly IT, and ‘capital compression’ of £7Bn for investors as the same capital requirement would satisfy both exchanges.”The savings seem rather meagre in a merger which appears to be designed to avoid upsetting staff, directors and, indeed, competition authorities. Previous stock exchange merger attempts have attracted sufficient attention to prevent progress and hence the particularly gentlemanly approach on this occasion.”The real issue is achieving scale to compete on a global scale against already consolidated opponents. Europe needs a strong champion to compete against the US exchanges and Hong Kong. In the past European competition authorities have tended to see such mergers at a European level. The issue this time may be the complications of a possible Brexit.”Whilst promoted as a ‘merger of equals’ with top jobs respectively filled by a balance of directors from both businesses, in practice such arrangements rarely work. ‘Mergers of equals’ usually result in a lack of clarity in direction and leadership as both camps jockey for influence. A result is a confused structure and a failure to drive cost savings opportunities arising from the merger. This situation can persist for several years before investor pressure results in one camp taking overall responsibility and addressing the necessary savings.”Currently the most likely intervention is likely to come from the US network of exchanges and clearing houses ‘Intercontinental Exchange’ lead by founder and president Jeffrey Sprecher. However the current approach of the LSE and Deutsche Borse may not be aggressive enough to see off Sprecher’s unwanted attention. Intercontinental, based in Atlanta, was founded in 2000 compared to the rather more illustrious history of LSE founded in 1571 and opened by Queen Elizabeth.”

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Expert comment on Asahi attempting to buy Peroni, Grolsch and Meantime

Posted by fidest press agency su giovedì, 11 febbraio 2016

beer marketExpert comment on Asahi attempting to buy Peroni, Grolsch and Meantime John Colley, of Warwick Business School, is a Professor of Practice, a former CEO of a FTSE 100 company and researches large takeovers. Professor John Colley said: “The speed at which this deal is being done in an attempt to appease regulatory authorities demonstrates the determination of AB InBev to complete on the SAB Miller takeover, which will give them almost 30% of the global beer market. It is difficult to see how this level of concentration will be in the beer drinkers’ best interests. However, the overall price of the deal and the extent of the necessary disposals, suggests that AB InBev’s shareholders may not benefit either. The 20% share of the Chinese market which the Snow brand holds may well be the next forced sale.”Asahi is the biggest Japanese brewer with 38% of the market, but little outside Japan. Clearly this signals global ambitions for Asahi as it will give them a strong position in many developed markets. Access to distribution through these two premium brands and relatively local brewing will mean that Asahi’s own range of Super Dry ales can be introduced to a wide distribution as well. This is good news for the beer drinker as it may well lead to more choice and more competition.”

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Expert comment: Can the AB InBev, SAB Miller merger buck the trend of destroying value?

Posted by fidest press agency su giovedì, 12 novembre 2015

As the AB InBev and SAB Miller merger is finally agreed, John Colley, Professor of Practice at Warwick Business Schooland an expert on large-scale mergers, discusses what the deal and subsequent selling of MillerCoors means for the industry.”In view of the size and scale of AB InBev post the SAB Miller deal, there is likely to be further consolidation amongst the remaining players. This is a trend in the pharmaceuticals industry, where valuations are increasing as the industry rapidly consolidates. Size is necessary to compete on cost grounds and distribution grounds. Maintaining product availability through distribution requires sizeable advertising budgets in order to compete with the big brands. Molson Coors may not be independent for long. “For shareholders $106Bn is a steep price. Cost savings are estimated at $1.4Bn or seven per cent of sales. This is a figure well below expectations suggesting that pricing and distribution benefits may be the real driver of the deal. Forced sales such as the shareholding in MillerCoors through competition authority pressures with others to follow, possibly in China, Latin America and Europe, means lost value to shareholders. Further concessions may also be required in the USA. At what point does this become value destroying? Research shows most acquisitions result in destroying value rather than creating it. Will this deal buck the trend? “Big brand brewing is highly profitable due to scale and scope economies related to the size of the main players. However it is their stranglehold on distribution through bars, restaurants, supermarkets and entertainment venues which prevents effective competition. The power of advertising together with product availability is highly potent – just ask Coca Cola. A glance at AB InBev’s results shows that big brands are continuing to make ground further limiting competition. Beer markets are declining in many countries. This is partly through the move to craft beers, together with increasing popularity of wines and spirits.”It is rare that the number one player in an industry buys the number two player, creating a worldwide market share of almost 30 per cent in a consumer market. The global brewing industry is already concentrated, with the top five (soon to be four) sharing almost 50 per cent of the market.”Research shows that less competitors in an industry, and specifically the brewing industry, results in higher profits and consequently less consumer choice. This merger is likely to further restrict consumer choice. It will also limit price competition in an industry which already demonstrates stratospheric levels of profitability. AB InBev has Earnings before tax, depreciation and interest (EBITDA) of around 40 per cent. The beer consumers’ hope is the growth of craft beers. These are rapidly multiplying and have a significant share in pub sales.”

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