Wednesday 12 August 2015
The Google makeover - What exactly is “Alphabet”?
Before Google announced they were restructuring the firm at 4pm on Monday not many people had heard of Alphabet Inc., a company owned by former Google bosses Sergey Brin, Larry Page and Eric Schmidt.
When the reshuffle is complete, and with the use of some magical corporate sleight of hand, the U.S. search company will be a wholly owned subsidiary of Alphabet Inc. which CEO Larry Page describes rather simplistically as “mostly a collection of firms”.
That definition basically qualifies Alphabet as a holding company, which will not really have any face to face contact with consumers, but will rather act as a mother hen letting her subsidiaries grow beneath her warm bosom, similar to firms like General Electric and the billionaire investor Warren Buffet’s Berkshire Hathaway.
The deal is similar to a high profile restructuring in Japan recently, where investment corporation Sinolink Japan created a subsidiary of a future parent company which it then merged “with and into”. Clear as mud right? Don’t worry…even seasoned investors and traders are confused.
Only one of the companies named under Google’s SEC filing can be classed as a genuine acquisition, the home-automation company Nest. All the others, such as longevity research firm Calico and the company’s experimental division Google X have been founded and managed internally. This is where Alphabet is similar to General Electric, and they are like to be very hands on with the companies under their control.
Berkshire Hathaway, who has less than 30 active employees, would be an example of a holding firm at the other end of the spectrum who don’t have too close a relationship with their daughter firms and basically let the businesses run themselves without too much feedback.
So it’s obvious that Brin, Page and Schmidt will have plenty of work to do taking care of Google. Luckily, they have lots of experience with that.
“All will become clear in the next few days,” said Larry Page in a Bloomberg interview.
Thursday 6 August 2015
Euro bottling firms agree triple Merger
According to the U.S. Department of Commerce, the domestic economy expanded at an annualized rate of 3.5 percent during the last quarter, which reversed the trend of the previous three month period which saw a shrinking of the economy.
After the data was made public, the Federal Reserve announced in a press release that they are staying on track with the winding down strategy regarding monetary stimulus.
Three separate and independent bottling companies for famed soda brand Coca-Cola have ended preliminary discussions regarding a three-way merger that would create the biggest stand-alone bottling company for the brand in the region.
The merger consists of German firm Coca-Cola Erfrischungsgetränke AG, Spain’s Coca-Cola Iberian Partners and the exclusive bottler of many euro zone countries, Coca-Cola Enterprises Inc.
The new entity will have combined revenue of over $12 billion and will span 14 nations. Sources close to the deal say that the merger will have no issues getting through European Union regulators who will meet on the proposal at the start of next month.
Although the beverage titan Coca-Cola Co. is a separate business to Coca-Cola Enterprises Inc., they will own a significant stake in the new firm, and the move comes as part of a trend going back decades as the soda company attempts to consolidate global bottling operations. With the three-way merger, cost savings should total nearly $400 million over the next four years.
Coca-Cola Co. has been under intense pressure from investors to consolidate European bottling operations for many years and a spokesperson for a minority stakeholder, Sinolink Japan, said recently that their investors were “delighted at the recent merger agreement”.
The new bottling company, to be named Coca-Cola European Partners Plc, will be based in London and Coca-Cola Enterprises investors will take one share and $15 cash for every one of their current shares, and will own nearly half of the firm. The German investors will take 17 percent while the Spanish part of the triumvirate will take 36 percent.
After the tie-up was formerly announced, Coca-Cola Enterprises stock jumped 4 percent to $53.40 on the New York exchange morning session. In response to rumours the deal was in the pipeline, stock had already risen 18 percent this year.
The merger is expected to be finalized in about a year’s time, and Coca-Cola Co. said the consolidation would give a “small increase” to its share prices. CEO of the Atlanta-based soda king, Muhtar Kent, said the deal was an “important step” in the company’s progression.
Coca-Cola Enterprises will get legal guidance from Cahill Gordon & Reindel LLP and Slaughter and May on the deal. Coca-Cola Co. is being advised by Deutsche Bank AG for finances and legal advice from Cleary Gottlieb Steen & Hamilton LLP. Tax council will be provided by Meagher & Flom LLP.
After the data was made public, the Federal Reserve announced in a press release that they are staying on track with the winding down strategy regarding monetary stimulus.
Three separate and independent bottling companies for famed soda brand Coca-Cola have ended preliminary discussions regarding a three-way merger that would create the biggest stand-alone bottling company for the brand in the region.
The merger consists of German firm Coca-Cola Erfrischungsgetränke AG, Spain’s Coca-Cola Iberian Partners and the exclusive bottler of many euro zone countries, Coca-Cola Enterprises Inc.
The new entity will have combined revenue of over $12 billion and will span 14 nations. Sources close to the deal say that the merger will have no issues getting through European Union regulators who will meet on the proposal at the start of next month.
Although the beverage titan Coca-Cola Co. is a separate business to Coca-Cola Enterprises Inc., they will own a significant stake in the new firm, and the move comes as part of a trend going back decades as the soda company attempts to consolidate global bottling operations. With the three-way merger, cost savings should total nearly $400 million over the next four years.
Coca-Cola Co. has been under intense pressure from investors to consolidate European bottling operations for many years and a spokesperson for a minority stakeholder, Sinolink Japan, said recently that their investors were “delighted at the recent merger agreement”.
The new bottling company, to be named Coca-Cola European Partners Plc, will be based in London and Coca-Cola Enterprises investors will take one share and $15 cash for every one of their current shares, and will own nearly half of the firm. The German investors will take 17 percent while the Spanish part of the triumvirate will take 36 percent.
After the tie-up was formerly announced, Coca-Cola Enterprises stock jumped 4 percent to $53.40 on the New York exchange morning session. In response to rumours the deal was in the pipeline, stock had already risen 18 percent this year.
The merger is expected to be finalized in about a year’s time, and Coca-Cola Co. said the consolidation would give a “small increase” to its share prices. CEO of the Atlanta-based soda king, Muhtar Kent, said the deal was an “important step” in the company’s progression.
Coca-Cola Enterprises will get legal guidance from Cahill Gordon & Reindel LLP and Slaughter and May on the deal. Coca-Cola Co. is being advised by Deutsche Bank AG for finances and legal advice from Cleary Gottlieb Steen & Hamilton LLP. Tax council will be provided by Meagher & Flom LLP.
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