THE WEEK’S OVERVIEW – CORPORATE

Teamwork

A few items of interest that have might have been missed in the press of events:

  • CEO Mike Manley took over Fiat Chrysler Automobiles last year and has spent the year trying to buoy employees.  And, now that the merger with Renault has failed, he’s once again at work rallying the workforce.  The unexpected breakdown of the merger proposal leaves Manley with the task of determining what’s next for the company – whether to seek another merger partner or return to talks with Renault.  The French have cited the need for Renault and Nissan to strengthen their 2-decade partnership before getting involved in any new mergers as the reason for nixing the deal.  (Renault and Nissan are currently engaged in a heated dispute, over governance changes.) The Fiat Chrysler Renault merger would have created the world’s third-largest car company.
  • Tyson Foods processed two billion chickens last year and is now planning to introduce a new product this summer to add to their repertoire – nuggets made with peas, flaxseed and other plants.  The new addition is to compete with patties and sausages made by the startups and large food companies that are vying for a share of the fast-growing market in plant-based foods.
  • Salesforce.com has agreed to buy data-analytics platform Tableau Software, Inc. for $15 billion in stock.  This largest-ever acquisition is the company’s latest effort to fight off rivals that are challenging its dominance in software that helps companies delve into the data and understand their customers.
  • Amazon is abandoning its restaurant delivery service Amazon Restaurants on June 24, putting an end to its 4-year experiment of competing with Grubhub and Uber Eats.  The company failed to gain traction and news of its closing down was welcomed by Grubhub and Waitr Holdings.
  • The Wells Fargo subsidiary Eastdil Secured, a real estate firm, is buying back control of the company from Wells Fargo, which has owned the firm for 20 years.  The deal values the firm at $400 million.  Wells will retain a minority position and over time Eastdil employees will be able to own more than 40% of the equity.  Eastdil believes that they will prosper as an independent boutique operation.
  • Daniel Loeb’s Third Point hedge fund is pushing Sony to spin off its semiconductor business, saying that the company’s portfolio needs to be “less complex.”  Loeb believes that the proceeds of the sale should be invested in long-term growth or capital return to shareholders.  (Loeb has a $1.5 billion interest in the company, so one can see where this might be going.)  In 2013, Loeb tried to rally shareholder support for a spinoff of the company’s movie and music assets.  That action failed.  But now Loeb says that Sony’s gaming, music and pictures segments should become its core, following a spinoff of the semiconductor unit.  Always interesting to watch the actions of activist investors.

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