Britain heads for Brexit in name only 8 Dec 2017 Theresa May’s deal with the European Union averts a chaotic divorce for now. But a fudge about the Irish border exposes the difficulty of preserving trade while leaving the bloc. A transition phase will create scope for May - or another prime minister - to make new concessions.
Orange can squeeze out a higher valuation 7 Dec 2017 The telco’s share price has been held back by high investment, price wars, and the French state’s holding. But the company is ahead of rivals in laying fibre broadband and can pay bigger dividends. That will narrow the 16 percent discount at which it trades to European peers.
France and Germany look too alike to bond market 6 Dec 2017 The gap between French and German bond yields this week hit its lowest since 2009. Plans to revamp the way the euro zone works may spur investors to overlook differences between countries’ public finances. But a lack of discrimination is premature, and stores up fresh problems.
EU fight against tax havens has flaws 5 Dec 2017 The bloc has put 17 jurisdictions, including Panama and South Korea, on a blacklist for failing to fight tax abuses. European Union countries, however, are free to decide what steps to take against offenders. A laudable drive can be undermined if some choose a lenient approach.
Brexit deal hinges on enlightened obfuscation 5 Dec 2017 A plan for Northern Ireland to accept some EU rules has met with opposition in Belfast and demands for similar treatment elsewhere. Prime Minister Theresa May's best hope is to fudge tough decisions, and use the threat of a chaotic exit – or another election – to quash dissent.
Consumer groups’ health drive comes at a cost 4 Dec 2017 Germany’s Merck has invited bids for its $4.8 billion Seven Seas vitamins unit. With Pfizer also selling its over-the-counter business, Nestlé and rival consumer giants see opportunities to use their sharper marketing skills. But the health craze comes with pumped-up valuations.
Europe’s bad-loan struggle risks backfiring 1 Dec 2017 Italy is leading the resistance to a European Central Bank plan to shrink banks’ bad debts. A victory will be empty, though. Ignoring defaulted loans hurts new lending. Failing to clean up legacy balance-sheet risks could also kill off the euro zone’s bank deposit scheme.
Altran’s U.S. excursion needs precision execution 30 Nov 2017 The French engineering consultancy is buying KKR-controlled software specialist Aricent for 1.7 bln euros. There’s little overlap between the two, and cost savings may be hard to pull off. Still, rapid technological change and cheap borrowing make it a good time for bold deals.
SocGen’s new recipe is missing key ingredient 28 Nov 2017 The French lender has unveiled new plans to boost lacklustre shareholder returns. Its targets are admirable but predicated on demanding revenue growth forecasts. Cost cuts would be more reassuring for long-suffering shareholders.
Ocado gets dubious halo as Europe’s Amazon bulwark 28 Nov 2017 The online retailer’s shares jumped by a fifth after it signed a deal to develop Casino’s digital offering. Investors are pricing in more agreements as European grocers react to the U.S. tech giant edging onto their turf. Ocado’s track record suggests they may be disappointed.
Telecom Italia grid spinoff is no easy quick-fix 24 Nov 2017 The telecom group is reportedly exploring selling a stake in its network. A spinoff might boost TI’s valuation, and ease shareholder Vivendi’s feud with the Italian government. Yet fierce competition from rival Open Fiber would remain unsolved, and deter potential investors.
Review: Macron is a riddle wrapped in transparency 24 Nov 2017 A trio of books help explain how a political neophyte became the French president. One is a decent account of the election campaign, another delves deeper into his youth and family life. But even Emmanuel Macron’s own tome is short of detail on how he formulated his beliefs.
Altice’s Caribbean selloff signals shrinking ambition 23 Nov 2017 Patrick Drahi’s telecom and cable group may dump its Dominican Republic unit just four years after buying it. That adds credibility to the entrepreneur’s plan to cut debt by flogging assets. It also underscores that Altice’s days of heady, M&A-led growth are firmly in the past.
Patrick Drahi’s Altice faces tricky debt detox 20 Nov 2017 The tycoon’s telecom group has lost 40 pct of its value following weak results in France. The group is now pledging to cut its 50 bln euro debt pile and sell assets. Yet rising rates, growing competition and a complex financial structure leave Drahi little room for error.
Merkel’s weakness could give Europe strength 20 Nov 2017 The collapse of coalition talks will force German Chancellor Angela Merkel to weigh other options. Another grand coalition or a minority government would be preferable to new elections. Revamping the euro zone will be easier without the Free Democrats opposing fiscal integration.
Northern Ireland is Brexit’s Gordian knot 17 Nov 2017 Avoiding a hard border in the region is an aim of all sides in the Brexit talks. The least-worst fix is for Europe to treat Northern Ireland the way it does Norway. That’s only possible if pro-UK politicians in Belfast can be made to see the economic necessity.
Vivendi doubles down on video-game mystery 17 Nov 2017 The French media group won’t buy the rest of Ubisoft in the next six months, but nor has it said it will sell its 27 pct stake. It may even forgo voting rights to avoid making a bid. That leaves investors guessing as to its long-term plan, and marking down the stock accordingly.
Hadas: Unintended consequences may be new normal 15 Nov 2017 From Brexit to Donald Trump to Saudi Arabia, the world is full of surprises. But those cheering wrenching change may face further upsets. The UK rejoins the EU, the U.S. president discredits small government, and Saudis become poorer. The next shock may be the rise of dullness.
Euro zone boom stimulates reform complacency 14 Nov 2017 From Germany to Italy, growth is picking up in the once-troubled region. Rosy conditions should endure: investment and employment are still catching up after years of crisis. The risk is that politicians avoid tough decisions to prepare the incomplete bloc for the next downturn.
UK economy will share Theresa May’s pain 13 Nov 2017 The Prime Minister is facing growing challenges to her leadership from the ruling party’s pro- and anti-EU factions. Political disarray increases the risks that leaving the European Union will do serious economic harm. A softer Brexit is growing harder to deliver.