recentpopularlog in

jerryking : divestitures   7

GE and Siemens: power pioneers flying too far from the sun
November 12, 2017 | FT | by Ed Crooks in New York and Patrick McGee in Frankfurt.

Rivals GE and Siemens both face difficult challenges ahead with the threats emanating in the 21st century from the renewable energy revolution that risks rendering obsolete their century-old strengths in supplying equipment for the electricity industry.....As the costs of solar and wind power have plunged, making them cheaper than fossil fuel generation in many parts of the world, the traditional model of the industry has changed. Capital spending on the new technologies has soared. Battery storage is also starting to be a cost-effective solution for supporting the grid, challenging the market for “peaker” gas turbines that are used when demand is at its highest. Yet both groups have taken positions in renewable energy but have stumbled along the way.

The result is that GE and Siemens are being forced to drive down costs dramatically in their core power businesses. Siemens is looking to cut thousands of jobs in its power and gas unit....while both groups face a turbulent environment, the immediate outlook is considerably brighter at Siemens, which appears to be better positioned to adjust to the disruption sweeping through the energy industry....GE’s 2017 has been a disaster.....GE's CEO, John Flannery, has already moved fast to signal his intentions: clearing out many top executives, grounding corporate jets, stopping the cars provided to senior managers, cutting back the network of global research centres and promising to sell peripheral and underperforming businesses worth up to $20bn....GE's sales of aeroderivative gas turbines, used to support grids at times of peak load, were half the planned numbers, while sales of packages for improving the performance of gas-fired plants were just a third of projections.....“All major vendors got the market [i.e. for gas turbines] wrong,” ...The next big worry is servicing for turbines — once a gold mine but one that is bound to decline as new orders fall. With turbines being sold at no margin or sometimes at a loss, competition for servicing contracts is heating up, further eroding margins.

For the foreseeable future, the gas turbine market is likely to remain difficult,...“The question is whether this is just a cyclical problem, or whether there is something structural in the industry that is really starting to cause problems.”

There is good reason to think that it is structural, given the plunge in solar and wind costs. ... “a combination of rooftop solar and battery storage could make economic sense in India, African countries and other places where they don’t have well-developed power grids”......According to the IEA, in 2016 $316bn was invested in renewable energy worldwide last year, almost three times as much as the $117bn in fossil fuel power generation.....If Mr Flannery founders, then breaking up GE might come to seem like the only option left to investors. It would not magically dispel the problems of the business, and would be difficult because of the group’s complex tax position and liabilities, including insurance claims dating from before GE pulled out of the industry in 2004-2006.

To avoid a break-up, GE might follow the template Siemens created in 2014 for a more decentralised structure. Mr Kaeser calls it a “fleet of ships” model, with divisions becoming semi-autonomous and separately listed. Siemens’ largest division, its medical equipment unit, is scheduled to list next year.

“The time of old-fashioned conglomerates is over,” he says. “They are definitely not going to survive.”
CEOs  Siemens  GE  industrial_age  founders  19th_century  decentralization  conglomerates  renewable  obsolescence  solar  batteries  cost-cutting  turnarounds  divestitures  wind_power  under-performing  power_grid  electric_power 
november 2017 by jerryking
All dressed up with somewhere to go: How to succeed in selling your business without really trying (too hard) - ProQuest
Dec 2000 | Practical Lawyer 46. 8: 17-36| Fredric Tannenbaum.

Whatever the businessperson's reasons for sale, he typically has only one real chance to do it right. A sale process which is not conducted thoughtfully and efficiently may diminish the ultimate ability to maximize the sale price, not to mention disrupt employee morale, customer and supplier relations, and the owner's and the owner's family's peace of mind. The legal and strategic issues that an entrepreneur should address in preparing for the sale of his company are discussed. A special emphasis on pre-sale team formation, preparation for due diligence, retaining employees, corporate risk assessment and housekeeping, and avoiding common mistakes is provided. Valuation, pricing and structuring, letters of intent and definitive documentation are briefly discussed.
selling_a_business  divestitures 
november 2011 by jerryking
How sellers can attract the best buyers.
Sep/Oct 1995 | | Mergers and Acquisitions |Leonard S.Caronia.
The seller of a company should have in mind at all times the objective of attracting three or four bidders who are ready to commit to a transaction at pretty much the same point in time in order to gain the benefit of competition. A well-planned process begins with preparations for the sale and advances through a series of steps until the transaction is completed. The first step is for the business owner to make sure they have considered all other options before going ahead with a sale. The next step is to get the right kind of valuation. Other stages of the selling process include the development of a contact plan when likely buyers are determined, a presentation to be given by management, and the use of a letter of intent.
selling_a_business  memoranda  auctions  divestitures 
november 2011 by jerryking
Facing Budget Gaps, Cities Sell Parking, Airports, Zoos, Other Assets - WSJ.com
AUGUST 23, 2010 | Wall Street Journal | By IANTHE JEANNE DUGAN.

The privatization trend is being spurred by a cottage industry of consultants, lawyers and bankers. Allen & Overy, a New York law firm, dubs it "rescue investing" and recently provided investors a booklet on "jurisdictions of opportunity"—municipalities whose laws, budget woes and credit ratings make them most likely to make deals [jk: unexploited_resources ].

"More public-private partnerships for public infrastructure in the U.S. have reached commercial and financial close than during any comparable period in U.S. history," the booklet says.
airports  assets  austerity  cities  cottage_industries  cutbacks  deal-making  dealmakers  divestitures  entrepreneurial  fallen_angels  infrastructure  investors  law_firms  lawyers  municipalities  opportunities  opportunistic  parking_lots  pitches  PPP  privatization  prospectuses  rescue_investing  unexploited_resources  vulture_investing 
august 2010 by jerryking
How to Turn Trash Into Treasure - WSJ.com
April 13, 2007 | Wall Street Journal | By ELLEN BYRON. Under
pressure to deliver growth, a number of consumer-products titans,
including Procter & Gamble Co., Unilever and Colgate-Palmolive Inc.,
have been selling well-known but underperforming brands to better focus
on those with more potential. Smaller firms trying to play Dr.
Frankenstein have bought such familiar castoff brands as Sure and Right
Guard deodorants, Comet cleaner, Aqua Net styling products, Pert Plus
shampoo and Rit dye.
orphan_brands  resuscitation  marketing  consumer_goods  culling  P&G  Unilever  Colgate_Palmolive  CPG  divestitures  brands  under-performing  personal_care_products 
may 2009 by jerryking

Copy this bookmark:





to read