Sasol: Banking on India's Growing Energy Needs
Sasol, the South African company that is the world's leading producer of motor fuel made from coal, plans to invest $10 billion in India under a joint venture with Tata Group. The duo plans to eventually churn out 80,000 barrels of fuel a day from a coal deposit in the eastern state of Orissa. India's energy use is projected to more than double by 2030 as rising incomes boost demand for gasoline, diesel, and other fuels. Johannesburg-based Sasol produces more than 40 percent of South Africa's motor fuel using technology first employed by Nazi scientists and refined by apartheid-era engineers. The company is also actively scouting opportunities in other fast-growing emerging markets. Sasol already operates a coal-to-fuel plant in China and recently inked a deal to build one in Indonesia.
Caterpillar: Riding the Rails of the U.S. Recovery
The world's largest maker of construction equipment (CAT) agreed on June 1 to acquire a diesel-locomotive manufacturer for $820 million from Berkshire Partners and Greenbriar Equity Group. The deal represents a sizable bet on continued growth in rail transport. North American rail volume rose 8 percent in the first three months of 2010 from a year earlier and is up 18 percent year-on-year so far this quarter, providing further confirmation that the U.S. economy is on the mend.
RadioShack: Equity Players Eye an Electronics Chain
Blackstone Group (BX) is a leading bidder for RadioShack (RSH), according to a June 1 report in The New York Post. (Neither company would comment). Rival private-equity firms KKR, Bain Capital, and TPG may also jump into the fray, the paper reported. RadioShack has pared debt and capital spending in the last year. Profits are up, thanks to rising sales of mobile phones. The Fort Worth (Tex.) chain operates more than 6,500 outlets in the U.S. and Mexico.
Honda: Pay Hikes for Workers May Set a Precedent
Honda Motor (HMC) has offered to increase the pay of workers at four Chinese car parts plants by 24 percent, after strikes forced it to shut down production in the world's biggest car market. Other multinationals doing business in China may find themselves in a similar bind. Manufacturing job growth has accelerated to the fastest pace in at least five years, according to new data from The Federation of Logistics & Purchasing. Rising wages should stoke consumption, supporting Beijing's goal of shifting the nation's economy away from exports. But one short-term consequence may be a spike in inflation.
Zipcar: Car-Sharing Startup Preps for Prime Time
Zipcar, the car-sharing company that rents vehicles by the hour, aims to raise as much as $75 million from an initial public offering. The Cambridge (Mass.) company, which has not posted a profit since it was founded in 2000, will use the proceeds from the share sale to cut debt, expand its fleet, and make acquisitions, according to a filing with the Securities & Exchange Commission. Zipcar currently operates in 13 metropollitan areas, including London, where it acquired Streetcar in April. The company has also made an acquisition in Spain and is looking to expand in Europe.
Tenet Healthcare: Opportunity Scouting Down Under
Tenet Healthcare (THC) is in talks about a possible purchase of Healthscope, Australia's second-largest hospital operator. Healthscope announced on May 31 that it received two offers of $1.5 billion but has not identified the bidders. Dallas-based Tenet, the third-largest publicly listed hospital chain in the U.S., is scouting opportunities to tap rising spending on private health care. Purchasing Healthscope could improve Tenet's margins, since under Australia's health-care system, private hospitals generally serve patients who choose to buy their own insurance or pay for hospital care.
Sony: Bringing Its 3D Business into Focus
Sony (SNE) announced that it will start offering 3D titles for its PlaySation 3 gaming console beginning June 10. Mr. Pain, Strike HD, and WipEout HD will be available for download on Sony's PlayStation Store. The releases are timed to coincide with the rollout of Sony's 3D televisions. Sony Chairman Howard Stringer has said he expects 3D movies, pictures and games to be the company's next $10 billion business.