Trump lands pre-emptive blow in digital tax fight 11 Jul 2019 The U.S. president threatened tariffs on France for its plans to introduce a digital levy on groups like Facebook. The move gives him more leverage in discussions on how to reform international corporate tax. It also means there’s a lot more riding on the success of those talks.
Frere family’s private push is double-edged sword 10 Jul 2019 GBL, the holding company of Belgium’s Frere and Canada’s Desmarais families, may buy part of a 2.4 bln euro call-centre operator from KKR. CEO Ian Gallienne’s shift into unlisted assets could boost returns. But thin disclosure means his shares will suffer from a steeper discount.
Cox: Parisian elite’s offsite exposes fractures 8 Jul 2019 The annual gathering of French government, business and economic bigwigs in Aix revealed a political class struggling to deal with China, Trump and Big Tech. But French firms exude international ambition and benefit from globalisation. Reconciling the two will be tricky.
Elliott pounced on the wrong booze company 4 Jul 2019 The activist made a 1 bln euro bet on Pernod Ricard in December, arguing the French spirits group could be more profitable and better run. The Absolut maker’s shares have bounced 17% since. That’s about par with the market. But its arch-rival Diageo has done even better.
WPP disposal offers cautionary tale for Publicis 2 Jul 2019 The UK ad group is selling the debris from a debt-driven acquisition spree under former boss Martin Sorrell. Its $12.3 bln French rival is borrowing to splurge on a data business. Publicis’ lowly valuation shows investors fear that CEO Arthur Sadoun may repeat Sorrell’s mistakes.
Casino takes baby step on road to redemption 28 Jun 2019 The French grocer has simplified its Latin American structure. The bankruptcy of Casino’s parent company Rallye frees it to recapture some value for investors, and offloading stakes in Latam supermarkets would cut leverage. A focused French business could be an easier sell.
Emmanuel Macron’s sermon to Nissan is unhelpful 26 Jun 2019 France’s president is calling for more integration with Renault. The Japanese automaker’s shareholder meeting this week exposed deepening suspicions of the alliance, with CEO Hiroto Saikawa threatening to upend it. Paris will serve Renault better by keeping quiet.
Could Taylor Swift be a strategic American asset? 25 Jun 2019 The answer is obvious to her devoted fans. But they don’t get to decide. If Vivendi’s sale of a stake in $30 bln-plus Universal Music attracts China’s Tencent, the deal may need CFIUS approval. And President Trump could easily muster a reason, however thin, to shake it off.
Capgemini will toil to turn buzzwords into gold 25 Jun 2019 The French consultancy led by Paul Hermelin is buying R&D outsourcer Altran for 3.6 bln euros. It’s highly accretive to earnings, and they can cross-sell engineering and IT services to big firms. Apply a more sober financial lens, however, and the returns don’t quite stack up.
Natixis gives lesson in bond market fragility 24 Jun 2019 A fund unit owned by the French bank had to write down holdings of exotic bonds and penalise investors who pull money. It’s a prudent move that may stem outflows. But investors will be more nervous in future about funds that dabble in esoteric debt while promising easy liquidity.
Carrefour beats a dignified retreat from China 24 Jun 2019 The French retailer is selling its China operations to Suning after over two decades in the market. Valued at 1.4 bln euros including debt, the price looks decent given Carrefour’s slowing sales. For Suning and partner Alibaba, it opens a new front against Tencent and JD.
Debt debacle throws Natixis’ strategy off course 20 Jun 2019 The French lender’s shares fell 12% after Morningstar dropped ratings on one of its funds due to hard-to-trade bonds. That overstates the likely loss of earnings. The risk is that client withdrawals hurt CEO François Riahi’s plan to grow in areas other than traditional banking.
Cox: Not all Italians dislike the French, just 33% 21 Jun 2019 The feeling is not reciprocal. In the same Ipsos poll, only 6% of French respondents felt the same way about Italy. Given cultural and economic similarities, the two nations should arguably have the strongest bonds. Lopsided investment flows are one part of the problem.
Chanel’s bling valuation will keep suitors at bay 17 Jun 2019 The privately held label made 2 bln euros of net profit in 2018. Valued like rival Hermes, it’s worth 90 bln euros. Chanel may be in flux after Karl Lagerfeld’s death, but its bulk would make suitors think twice even if its controlling investor wanted to sell.
Sotheby’s bid a bad case of Pinault envy for Drahi 17 Jun 2019 Cable tycoon Patrick Drahi is buying the auction house for $3.7 bln at a 60% premium. Even with cost cuts, the financial prospects are humdrum. As with fellow French billionaire François-Henri Pinault’s purchase of Christie’s, the returns look more reputational than financial.
Rome can get edge on Paris with network M&A 17 Jun 2019 Telecom Italia may buy rival network provider Open Fiber. A deal could revive its fortunes by taking out a competitor. And a valuation of over 2 bln euros would allow the government, a shareholder in both, to secure control of the telco, at the expense of French rival Vivendi.
Viewsroom: When dealmaking gets difficult 13 Jun 2019 Raytheon and United Technologies’ planned $114 bln tie-up raises questions about strategy, cost cuts and executive overreach. It’s prompted their shares to tank and activist Bill Ackman to oppose it. And Fiat Chrysler and Renault’s mooted merger has crashed. Can they salvage it?
What’s under Renault’s hood? 13 Jun 2019 Appraise the French carmaker's parts to decide whether Fiat Chrysler's merger offer was stingy or fair.
Fiat’s Renault offer was fairer than it looked 13 Jun 2019 Some investors complained a 15 bln euro merger proposal from the Italian-American group put a negative value on the French carmaker’s core business. Use more realistic valuations for Renault’s parts, though, and the price looks better. Reviving the deal also unlocks huge savings.
Dassault’s drug data wager relies on heady growth 12 Jun 2019 The French software group is buying U.S. peer Medidata for $5.8 bln. The deal boosts Dassault’s exposure to the hot trend of using big data to develop and test drugs. But likely modest synergies and the rich price mean investors will have to wait years for the deal to pay off.