Latest news with #conglomerates
Bloomberg
03-07-2025
- Business
- Bloomberg
Korea's Reform Drive Gets a Boost as Lawmakers Vote for Changes
South Korea's ambitious plan to improve corporate governance standards got a boost after the parliament voted to approve changes that will help protect the rights of minority shareholders. The revisions to the so-called commercial code include making board members legally accountable to all shareholders, instead of catering largely only to those with significant stakes — such as the founding families of the nation's many conglomerates. Another key change is to limit the voting rights of the largest shareholders and related parties to 3% when appointing the members of an audit committee.
Yahoo
29-06-2025
- Business
- Yahoo
One of the World's Largest Alcohol Companies Isn't Giving Up on Wine
This story is from an installment of The Oeno Files, our weekly insider newsletter to the world of fine wine. Sign up here. Each time a major wine conglomerate announces it is selling brands or shifting priorities, the wine world alights with gossip, speculation, and cries that this is a sure sign of the end times. Almost two years ago, Washington State's largest producer, Ste. Michelle Wine Estates, announced it was cutting back its grape purchasing by 40 percent, and while many heralded it as a death knell to the state's wine industry, others saw a silver lining for smaller wineries. Last summer, Treasury Wine Estates revealed it was selling off several lower-priced brands—and then reversed the decision this past February when a suitable price could not be attained. Most recently, when news leaked that Constellation Brands was looking to off-load its wine portfolio to focus on core businesses, market watchers and wine prognosticators again noted it as a harbinger of doom, while a small segment of the wine world expressed premature condolences for recent acquisitions such as Sea Smoke and Lingua Franca, which had barely had time to benefit from being brought into the Constellation fold. More from Robb Report What Happened When This Founder Bought His Winery Back From Its Corporate Parent How Sullivan Rutherford Estate Made the Best American Cabernet Sauvignon of the Year A Music Industry Exec's Boldly Angled Santa Barbara Wine Country Estate Lists for $10 Million Those rumors turned out to be only half true. Constellation, a multinational beverage company whose original product was wine, is not getting out of the business; it is only selling off mass-market brands such as Woodbridge, Robert Mondavi Private Selection, Simi, and Meiomi. Meanwhile, the labels it is keeping—Schrader, Double Diamond, To Kalon Vineyard Company, Mount Veeder Winery, Robert Mondavi Winery, Booker Vineyard, the Prisoner, Sea Smoke, Lingua Franca, Kim Crawford, and Ruffino—speak volumes about its leadership's view that the future of wine is in the high end of the market. Constellation's sale of its brands to the Wine Group, which was finalized in early June, is not a first for the company; in 2021, Constellation sold E & J Gallo 30 labels, including Mark West, Clos du Bois, Franciscan, and Nobilo. Constellation, a publicly traded company, is also retaining its craft spirits portfolio, including High West Whiskey, Nelson's Green Brier Whiskey, Mi Campo tequila, and Casa Noble tequila, as well as Mexican beer producers Corona, Modelo, and Pacifico. While Constellation made a point of saying in the press release announcing the sale that it was retaining brands with wines predominantly priced $15 and above, many wineries remaining under the company's umbrella sell for much more than that. For example: Schrader Cellars RBS Beckstoffer To Kalon Vineyard Cabernet Sauvignon and two of its single-vineyard siblings retail for $525; a bottle of Robert Mondavi Oakville To Kalon Vineyard the Reserve Cabernet Sauvignon fetches $250; and in addition to two Sea Smoke Pinot Noirs that sell for $100, Sea Smoke Grand Pinot Noir Monopole, made only in the best years, carries a price tag of $725. Sam Glaetzer, Constellation's president of wine and spirits, says the decision to lean into luxury reflects what customers want: premium selections. 'This is supported by insights that show that higher-end wine segments are forecast to grow, while that is not the case for mainstream wine segments,' he tells Robb Report. Constellation is responding to a phenomenon known as 'premiumization' in the trade, says industry analyst Rob McMillan. The EVP and founder of Silicon Valley Bank's wine division publishes the highly anticipated State of the Wine Industry Report each year, so he keeps a close eye on economic trends in the wine world. 'The business model focusing on low-cost, high-volume production efficiency has been in decline for well over a decade, replaced by growing demand for better-quality, higher-priced wine made in smaller quantities,' McMillan says. This shift in consumer behavior that began in 2018 has now created the demand that moved Constellation to retain higher-growth, luxury brands. Focusing on the upper end of the market makes a lot of sense for a company in the here and now, but increased premiumization could pose a threat to the future of the wine industry. In McMillan's 2022 report, he wrote that 'the issue of greatest concern for the wine business today continues to be the lagging participation in the wine category by the large millennial generation.' One factor he cited was a lack of discretionary income compared to previous generations. 'That's a primary reason that millennials have gravitated to beer and spirits rather than wine,' wrote Eric Asimov in The New York Times in the wake of the report. 'The difference between a mass-market brew and a world-class beer is just a few dollars. By comparison, good wine is more expensive than beer or spirits of comparable quality.' Without a focus on affordable, quality, mid-tier wines, the industry may run the risk of not cultivating new wine drinkers among the next generations. Of course, if consumers are ignoring wine as a mass-market product—as Constellation's earnings reports suggested last year when the company announced up to a $2.5 billion write-down on its wine and spirits business—then focusing on making a premium offering could be the most beneficial path for a brand like Constellation. That's how Glaetzer is approaching it now. Hailing from a well-known Australian winemaking family, he's at home with a portfolio of high-end winemakers committed to practicing their craft and wants to give them space to do just that. He says Constellation acts a foundation that provides resources like a global sales network, capital for growth, and infrastructure, but allows individual wineries to work independently. 'Each has the latitude to operate according to its unique identity and perspective so the teams can focus on what matters most: crafting wines true to their terroir,' Glaetzer says. Hilary Graves, Booker's senior manager of vineyard and grower relations, says that while she and her team in Paso Robles are free to make their own decisions around farming practices, having corporate support enables her to engage in experimental practices to solve problems and keep sustainability at the forefront. 'Using sheep to do our first mowing pass, for example, has given us the opportunity to cut down on our use of fossil fuels and trim our farming costs,' she says. 'Using a drone to drop lacewings as a means of controlling leafhoppers results in increasing biodiversity in our vineyard while also reducing tractor passes.' And Don Schroeder, director of winemaking at Sea Smoke in Santa Barbara County (which only joined Constellation a year ago), says he's already seen the upside of the company's approach. 'We have benefited from a tremendous amount of support and additional resources,' Schroeder says. 'This includes Constellation's internal team taking on compliance and regulatory reporting, which allows our core Sea Smoke team more flexibility to focus solely on our vineyard and the quality of our wines.' It's a further example that Constellation isn't giving up on wine; it's setting its sights more squarely on fine wine. Do you want access to rare and outstanding reds from Napa Valley? Join the Robb Report 672 Wine Club today. Best of Robb Report Why a Heritage Turkey Is the Best Thanksgiving Bird—and How to Get One 9 Stellar West Coast Pinot Noirs to Drink Right Now The 10 Best Wines to Pair With Steak, From Cabernet to Malbec Click here to read the full article. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
19-06-2025
- Business
- Globe and Mail
Dividend-paying conglomerates with break-up potential that may reward investors
Sustainable dividends from conglomerates well placed to unlock holding company discounts. Honeywell International Inc. HON-Q shares rose early this week after the industrial conglomerate reiterated plans to split into three independent companies. The move, spurred by activist investor Elliott Investment Management, should further lift Honeywell's share price and so shrink its 'holding company discount.' That's the tendency for multifaceted conglomerates to trade for less than the total value of their various parts. Holding companies often see their share prices rise after opting to break themselves up into their constituent businesses. Essentially, the market finds it easier to assess the value of 'pure-play' firms. We started with our extensive list of dividend-paying Canadian and U.S. companies, before singling out conglomerates offering steady growth prospects – as well as breakup potential. We then applied our TSI Dividend Sustainability Rating System to home in on top dividend payers. Our system awards points to a stock based on key factors: Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above average sustainability; average sustainability, four to six points; and below average sustainability, one to three points. TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor, and the TSI Dividend Advisor. TSI Network is also affiliated with Successful Investor Wealth Management. Our TSI Dividend Sustainability Rating System generated five stocks: Montreal-based Power Corp. of Canada POW-T holds controlling interest in Great-West Lifeco Inc., IGM Financial Inc. and much more. Calgary-headquartered ATCO Ltd. ACO-X-T owns 52.5 per cent of Canadian Utilities Ltd. CU-T but also ATCO Structures & Logistics and 40 per cent of Neltume Ports; the latter operates 18 ports and related operations in South America. Honeywell International Inc., based in North Carolina, had already spun off two subsidiaries (Resideo Technologies Inc. and Garrett Motion Inc. GTX-Q) to shareholders in 2018 and now plans to break up even further. Global conglomerate 3M Co. MMM-N, with headquarters in Minnesota, sells a wide array of products with little overlap and so has a lot of breakup potential. In fact, it spun off its health care unit as Solventum Corp. SOLV-N last year. Washington-based Danaher Inc. DHR-N has made a number of breakup moves in the past but still has a varied range of businesses well-positioned for hiving off as standalone firms. We advise investors to do additional research on investments we identify here. Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.
Bloomberg
06-06-2025
- Business
- Bloomberg
Blockbuster Mergers Return as Industrial Breakups Reach Limit
To get Industrial Strength delivered directly to your inbox, sign up here. After a decade of conglomerate breakups, the time may finally be right for the reemergence of another type of dealmaking: mergers of equals.
