Latest news with #divestitures
Yahoo
a day ago
- Business
- Yahoo
After a 15% decline, should I move on from this FTSE 100 stock?
When I started buying shares in DCC (LSE:DCC) last year, I had a two-part investment thesis. Neither's going to plan, so I'm thinking about selling the FTSE 100 stock and moving on. Even the best investors get things wrong. And as Warren Buffett says, one of the most important things is being able to move on quickly when an investment doesn't turn out as expected. The plan My general view of DCC was that the entire company was worth much more than the sum of its parts. And the firm was looking to sell its healthcare and technology divisions to realise this value. Analysts estimated these to be worth £2.1bn – over 33% of the firm's market value. And with its balance sheet in good shape, the cash could be used for dividends or share buybacks. That would leave the energy unit, which was making just over £500m a year in operating income. More importantly, it was growing at around 9% a year. All of that sounds pretty good, but things haven't gone according to plan. The divestitures haven't – so far, at least – raised the expected cash and growth in the energy business is slowing. What's been going on? DCC announced the sale of its healthcare unit earlier this year. But the £1.1bn sale price was a 15% discount to the £1.3bn analysts had been expecting. Worse yet, the company's full-year results for 2024 showed slowing growth in the energy business. And it's started the year (beginning in April) with a slight year-over-year decline. The latest news is that DCC's sold its UK and Ireland distribution business (part of its technology unit) for £100m. Given that it was essentially breaking even, that's not a bad result. That leaves the larger part of the technology division still to divest, but unless it achieves a surprising valuation, my overall thesis is going to come up short. So what should I do? A dilemma All of this leaves me with a dilemma. I'm a big believer in the benefits of being a long-term investor, but the underlying business looks a lot less attractive than it used to. There's another £700m on the way via a share buyback, plus whatever the firm can raise by selling its remaining technology operations. The big question is whether or not that's worth waiting for. DCC started buying back shares in May, but the stock has fallen 5% since then. So there's no guarantee a falling share count will cause the stock to rally. Ultimately though, the biggest question is over the energy unit. The long-term outlook for the stock depends on that part of the company being able to keep growing. Thesis busted? DCC's energy division is on the edge of my circle of competence. I'd hoped the cash raised by divesting the healthcare and technology units would give me enough of a margin of safety. That hasn't really happened. That's obviously a disappointment, but that happens in investing. With a dividend on the way later this week, I haven't (yet) lost much on this one. I've got my eye on some other FTSE 100 stocks, but I might wait and see how the rest of the restructuring goes. The post After a 15% decline, should I move on from this FTSE 100 stock? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Stephen Wright has positions in DCC Plc. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 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
Reuters
3 days ago
- Business
- Reuters
US utilities hit the M&A trail as AI boom drives up power demand
July 18 (Reuters) - U.S. utilities are snapping up assets and shedding units to fund their deals as they prepare to meet a massive surge in demand over the next two years, driven by power-hungry data centers needed to support the boom in artificial intelligence usage Power demand from data centers in the U.S. is expected to nearly triple in the next three years and consume as much as 12% of the country's electricity, according to a Department of Energy-backed study. Here are some of the biggest mergers, acquisitions and divestitures announced in 2025:
Reuters
01-07-2025
- Business
- Reuters
GC Agenda: July 2025 Practical Law The Journal
Antitrust Structural Remedies The FTC and DOJ Antitrust Division have recently shown a renewed willingness to resolve merger challenges through structural remedies, including divestitures. During the Biden administration, the antitrust agencies were generally skeptical of structural remedies and preferred to block potentially harmful mergers outright rather than negotiate a settlement. As a result, during the Biden administration, there was a sharp decrease in the number of merger challenges that settled (for more information, see Federal Merger Enforcement Year in Review: 2024 on Practical Law). There was also a sharp increase in the number of abandoned transactions. The antitrust agencies' approach has changed under the Trump administration. For example, the FTC and DOJ Antitrust Division recently approved the following mergers subject to divestitures: Synopsys/ANSYS. On May 28, 2025, the FTC approved the $35 billion merger of Synopsys, Inc. and ANSYS, Inc., subject to divestitures. The merger would combine two companies that develop software related to the design, analysis, and testing of semiconductors, including optical tools, photonic tools, and power consumption analysis tools. Under the proposed settlement, the parties agreed to divest Synopsys's optical and photonic software tools, as well as ANSYS's power consumption analysis tool. Both Synopsys and ANSYS will divest their assets to Keysight Technologies, Inc. Keysight/Spirent. On June 2, 2025, the DOJ Antitrust Division approved the $1.5 billion merger of Keysight Technologies, Inc. and Spirent Communications plc, subject to divestitures. The merger would combine two companies that develop software tools for, among other things, high-speed ethernet testing, network security testing, and radio frequency (RF) channel emulation. Under the proposed settlement, Keysight is required to divest Spirent's high-speed ethernet testing, network security testing, and RF channel emulation businesses to Viavi Solutions, Inc. Safran/RTX. On June 17, 2025, the DOJ Antitrust Division required divestitures to approve Safran's acquisition of Collins Aerospace's aircraft actuator and flight control businesses from RTX Corporation. The DOJ Antitrust Division alleged that Safran and RTX are two of the leading suppliers of trimmable horizontal stabilizer actuators (THSAs) for large aircraft. The proposed settlement requires Safran to divest its North American actuator business and its Canada-based electronic control business to Woodward Inc., including the tangible and intangible assets necessary to produce and sell THSAs. In approving the Synopsys/ANSYS merger, FTC Chair Andrew Ferguson also issued a statement addressing the role of remedies in merger review. He confirmed that the FTC will accept divestitures to resolve antitrust concerns where: These comments align with recent statements from the DOJ Antitrust Division's Deputy Assistant Attorney General Bill Rinner, which expressed a strong preference for structural remedies. (For more on structural remedies in merger settlements, see Merger Remedies on Practical Law.) Commercial Transactions FCPA Enforcement In-house counsel should be aware of a significant shift in Foreign Corrupt Practices Act (FCPA) investigations and enforcement that will impact the corporate enforcement landscape. The DOJ recently released a new enforcement framework explaining a redirection of agency resources from preventing and penalizing white collar crime to immigration, transnational crime, and narcotics enforcement, creating a gap in corporate enforcement. This shift has empowered state attorneys general and local regulatory bodies to strengthen their investigative roles, leading to a more disjointed and complex set of rules for companies to navigate. This strategic pivot is expected to increase the frequency and force of parallel investigations at the state level, especially in areas like consumer protection and securities fraud. As a result, companies will have to navigate a patchwork of regulatory rules, priorities, and enforcement styles across different jurisdictions. Companies operating in multiple states should consider whether they will need to increase their legal and compliance resources to track and respond to state-level investigations. (For information on the FCPA generally, see The Foreign Corrupt Practices Act: Overview on Practical Law.) Data Privacy & Cybersecurity AI Governance Companies that use AI technologies should consider establishing an AI governance framework. An AI governance framework is particularly important for companies that broadly implement AI technologies or use them with personal information. An AI governance framework can: An ongoing risk assessment process is essential to an effective AI governance program. To address the legal and ethical risks of using AI technologies, companies should: Establish or update internal policies that support their AI governance plans. Be able to explain AI system outputs to aid understanding of data privacy and ethics implications. Evaluate AI tools on an ongoing basis with a focus on: data protection; monitoring and incident reporting; and training, to ensure that employees follow proper protocols and understand the reasons behind them. AI-specific laws do not yet exist in many jurisdictions. Therefore, companies that want to create an AI governance framework should: Consult internal stakeholders to determine organizational AI objectives and risk tolerance. Apply guidance and voluntary codes that some governments, privacy regulators, and organizations have introduced in the absence of binding AI rules (for example, the National Institute of Standards and Technology (NIST) AI Risk Management Framework 1.0). Recognize that existing data privacy laws may apply to AI use that includes personal information or generates new personal information. Use a forward-looking approach and consider the potential effect of proposed AI laws. By adopting an AI governance framework and incorporating responsible AI principles into their processes, companies can foster stakeholder confidence while ensuring that their AI use appropriately supports their business objectives. (For more on implementing an AI governance framework, see AI Governance Roadmap (US) and AI Governance Checklist on Practical Law; for a collection of AI-related resources, see AI Toolkit (US) on Practical Law.) Finance Crypto Market Regulation The House Financial Services Committee recently introduced into the US House of Representatives an updated crypto market structure bill that would provide a regulatory framework for crypto and digital assets in the US. Committee Chair French Hill introduced the Digital Asset Market Clarity Act of 2025 (the Clarity Act), which follows a prior draft entitled the Digital Asset Market Structure Act released in early May. The Clarity Act represents a slightly more fine-tuned framework for crypto market regulation than the prior draft. Similar to the prior draft, the Clarity Act would: Grant primary regulatory jurisdiction to the Commodity Futures Trading Commission (CFTC) over digital commodity cash and spot market transactions that occur on digital commodity exchanges or involve commodity brokers and dealers. Create a comprehensive federal regulatory framework under the Commodity Exchange Act (CEA) for the registration, oversight, and supervision of digital commodity brokers and dealers. Require CFTC-registered entities to comply with recordkeeping, reporting, business conduct, and customer protection standards, as well as meet capital and risk-management requirements. Implement segregation requirements and commingling prohibitions for customer funds held by commodity brokers or dealers unless the customer elects in writing otherwise. Set out qualifications for digital asset custodians, which must be subject to adequate supervision and appropriate regulation by certain federal, state, or foreign authorities. The Clarity Act deviates from the prior draft regarding certain requirements and deadlines, including that it would: Require the CFTC to make a certification decision regarding eligibility of a digital commodity within 20 days. If no decision is made, the certification would be approved. Not require digital commodity exchanges to trade and list only those digital commodities 'that are not readily susceptible to manipulation.' (For more on the Clarity Act and the prior draft, see US House Unveils Clarity Act Crypto Market Structure Bill and Federal Legislators Introduce Digital Asset Market Structure Act on Practical Law.) Health Care Physician Non-Competes Counsel should work closely with their health care clients to ensure that physician non-compete agreements are legal, enforceable, and consistent with public policy. Non-competes limit an individual's ability to engage in competitive activity for a certain time period post-employment, usually within a designated geographic area. In the context of physicians, numerous legal and ethical issues arise, including patient choice and access, continuity of care, and non-abandonment. Recognizing that the sensitive and personal nature of the doctor-patient relationship requires special protection and stricter scrutiny, courts have struck down non-compete provisions that prohibit patients from seeing a doctor of their choice in certain situations. While no federal law specifically addresses health care non-competes, many states limit or prohibit physician non-competes and other restrictive covenants, including: Non-solicitation agreements, which restrict practitioners from soliciting certain patients for a specified time period. Non-treatment agreements (also called non-acceptance or non-service agreements), which prohibit practitioners from treating certain patients for a specified time period. The enforceability of these agreements may be influenced by: Patients' rights to access, choose, and continue to receive treatment from specific health care professionals, particularly physician specialists, during the course of an acute illness or injury. The availability of primary care physicians and specialists in geographic areas with limited medical services, such as rural communities (often called health care deserts). The provision of telemedicine services, which enable physicians and other practitioners to provide diagnostic, treatment, and monitoring services to their patients remotely, often across state lines. Counsel should monitor changes in federal and state law that may affect physician non-competes and review existing non-competes to assess their continuing enforceability. (For more on health care non-competes, see Health Care Non-Competes in the June 2025 issue of Practical Law The Journal; for a chart summarizing laws governing health care non-competes in all 50 states, see Health Care Non-Compete State Law Chart: Overview on Practical Law.) Intellectual Property & Technology Agentic AI Risk Companies employing agentic AI should understand that the inherent autonomy of agentic AI can both compound baseline AI risks and create new risks, including those related to IP, privacy, cybersecurity, and product liability. Agentic AI offers the potential for significant efficiency gains in planning and executing business processes. As with AI systems generally, certain uses of agentic AI pose greater risk, for example, agentic AI with the ability to enter into binding contracts on the company's behalf or access and use personal information. Although each company's unique circumstances require tailored assessment and implementation, companies should establish a multi-pronged approach to risk mitigation, including: Contractual protections. Although market norms for contractually addressing agentic AI risk are still in the early stages, companies should consider how to respond to agentic AI providers likely seeking enhanced disclaimers, limitations of liability, and indemnification. Companies should clearly define agentic AI's goals and authorized actions and assess contractual support commitments and provider capabilities. AI governance. Companies should implement robust AI governance policies that include rigorous pre-deployment testing and ongoing monitoring by and training of business, technical, and legal teams. Technical safeguards. Companies should employ appropriate technical protocols and other guardrails regarding access to and interaction with internal and external data and systems. Companies should also ensure there is a 'human in the loop' or 'human on the loop' by establishing clear processes for active human participation or active human monitoring, with the ability for humans to intervene quickly, to facilitate rapid response to and mitigation of unforeseen behavior. Companies adopting agentic AI systems must also implement compliance strategies to address the rapidly evolving legal and regulatory landscape. (For a collection of resources addressing these and other AI-related issues, see AI Toolkit (US) on Practical Law.) Labor & Employment Immigration Issues Impacting Employers Immigration policy potentially impacts all workplaces. Employers must have appropriate plans in place to respond to the issues that may arise as a result of the shifting immigration environment. Employers should evaluate their risk for increased immigration enforcement, including: Form I-9 (I-9) audits. ICE raids. Fraud detection site visits. Potential anti-discrimination claims under the Immigration Reform and Control Act of 1986 (IRCA). All employers should prioritize I-9 compliance and have clear I-9 protocols. Personnel responsible for carrying out I-9 functions should undergo regular training on the protocols and I-9 requirements. Employers should also regularly conduct I-9 self-audits and ensure that their I-9 protocols and hiring practices minimize the risk for claims from the DOJ's Immigrant and Employee Rights division. Employers should develop written response plans for on-site enforcement actions such as raids and site visits, designating key players and protocols. They should regularly train designated personnel on enforcement activity responses, including: Verifying government credentials. Reviewing warrants and authorizing documents. Understanding the rights and limitations of government agents in the workplace. Employers should also clearly mark public and restricted non-public workspaces and educate employees about their legal rights during enforcement actions. The Trump administration's enhanced vetting procedures mean potential travel disruption for non-citizen employees in visa applications and US entry. Employers should monitor travel risks, minimize non-essential travel, and provide guidance to employees who must travel, including how to respond to a request to search company-issued electronic devices and remote work arrangements for employees who cannot return to the US as planned. Employers filing petitions with US Citizenship and Immigration Services should plan for slower processing and less certainty by: Assessing their strategic approach to ensure continuity for key non-citizen talent. Reviewing sponsorship policies and process workflows and adjusting them as needed. Filing petitions and applications as early as possible to account for potential delays. Employers should audit employee records to identify employees who may be affected by DHS actions terminating humanitarian parole and temporary protected status programs and evaluate options for alternative visas or prepare for potential business disruption resulting from lost employment authorizations. Recognizing that immigration issues can create apprehension for human resources personnel, line managers, and non-citizen employees, employers should: Focus on minimizing risk to the company's reputation and disruption to its business operations. Clearly communicate policies, plans, and any training to impacted personnel. (For more on key US immigration developments, including laws, regulations, and other administrative agency guidance and interpretations issued in 2025, see 2025 US Immigration Developments Tracker on Practical Law; for a collection of resources to help employers comply with legal requirements of employment eligibility verification and other immigration-related obligations, see Immigration Compliance Toolkit on Practical Law.) Litigation New Proposed Federal Rule of Evidence Governing AI Corporate counsel should prepare for significant changes to how machine-generated evidence is handled in federal courts under proposed Federal Rule of Evidence (FRE) 707. This rule would elevate AI-generated evidence to the same admissibility standards as expert testimony under FRE 702. If adopted, FRE 707 would require machine-generated evidence offered without an expert witness to: Be based on sufficient facts or data. Result from reliable principles and methods. Be reliably applied to the facts of the case. Only basic scientific instruments would be exempt from these heightened standards. FRE 707 represents a significant shift in evidentiary standards for the increasingly AI-driven legal landscape, requiring proactive preparation from corporate legal departments. To prepare for potential implementation of FRE 707, corporate counsel should: Conduct an evidence inventory. Identify the types of machine-generated evidence the company might rely on in litigation. Establish documentation protocols. Create systems to record how the company's AI tools function, their testing methodology, error rates, and validation procedures, as well as their training data and inputs. Assess vendor capabilities. Determine whether the company's technology vendors can provide the necessary validation information to satisfy FRE 707's standards. Review technology contracts. Ensure vendor agreements include obligations to assist with meeting evidentiary requirements, including potential expert testimony. Adjust the litigation budget. Anticipate increased costs for technical validation of machine-generated evidence and potential expert testimony requirements. (For more on the implications of using AI in litigation, see Generative AI in Litigation in the March 2024 issue of Practical Law The Journal; for a collection of resources to assist counsel with generative AI, see AI Toolkit (US) on Practical Law.) Real Estate Material Shortages The tariffs implemented by the Trump administration have broadly impacted the real estate and construction industries, disrupting project timelines, budgets, and global supply chains. The tariffs have led to increased costs and decreased availability of steel and aluminum, critical materials for construction projects. These material shortages have resulted in delays, surging prices, and budget overruns for many projects, forcing many companies to reassess their financial projections. Counsel should address the implications of material shortages for both existing and proposed construction contracts by: Reviewing force majeure clauses, which may cover tariff-related disruptions. Assessing project timelines and renegotiating contracts where necessary. Evaluating budgetary impacts and assisting clients in reviewing contracts for clauses related to price adjustments. Working with clients to assess financial projections to account for surging material costs. Ensuring supply contracts include provisions for alternative sourcing and contingencies in case of disruptions. Keeping clients updated on trade policy changes and providing advice on compliance with international trade regulations. Counsel should closely monitor the evolving laws and regulations related to these issues. (For more on regulatory developments related to real estate and construction projects, see Key Developments Under Second Trump Administration Impacting Real Estate and Construction and Trump Tariffs' Impacts on Construction Materials in the March 2025 issue of Practical Law The Journal.)
