LVMH has smarter way to tackle succession dilemma 11 Jan 2023 Bernard Arnault picked his daughter Delphine to run the luxury giant’s Dior brand. If she proves her mettle, she may win the race among her siblings to eventually replace the 73-year-old tycoon. Naming one heir would help LVMH extend its success to the next generation.
Macron’s fiscal torpor will weaken France 29 Dec 2022 The French president is running the only big European economy whose public debt, now at 112% of GDP, is still rising. High government spending helped during the crises but is now pushing up bond yields, stifling growth. Budget neglect will also erode Paris’s influence in the EU.
Big Pharma’s heartburn win is a valuation salve 7 Dec 2022 GSK, Haleon and Sanofi’s combined worth rose $14 bln after a U.S. judge dismissed claims that a drug causes cancer. It frees up cash for new research and deals. The victory also helps lay to rest the ghost of Bayer’s Roundup legal thwack, which has haunted the sector since 2020.
Gucci designer’s exit boosts Kering’s M&A urgency 24 Nov 2022 Alessandro Michele’s departure from the bling group’s top label puts CEO François-Henri Pinault on the spot. Finding a new creative star will be hard, and he needs more brands to cut his $71 bln firm’s reliance on Gucci. A recent miss on Tom Ford also weakens his dealmaking hand.
SocGen’s BNP envy carries a cost 22 Nov 2022 Future CEO Slawomir Krupa is merging his stock research and trading unit with U.S. peer AllianceBernstein, aping his French rival’s capital markets drive. But the $20 bln bank will lack the scale of U.S. rivals, and growing in low-return businesses won’t help a lagging valuation.
Geely and Renault engineer new model for old tech 9 Nov 2022 The Chinese and French duo will jointly supply hybrids and gas guzzlers to rivals. Doubt over the role of Renault’s Japanese partner Nissan is awkward, but as automakers hesitate on investing in legacy vehicles, the idea is smart. Scale and moving first will help them rev up.
Renault’s Nissan silence undermines grand revamp 8 Nov 2022 The 9 bln euro carmaker will spin off its electric vehicle unit and partner with China’s Geely on combustion engines. But, while unveiling his strategy in Paris, Luca de Meo remained mum on his Japanese partner. Governance uncertainty makes the complex plans even trickier.
Tom Ford return offers remedy for Gucci fatigue 4 Nov 2022 Kering is considering a swoop on the U.S. fashion house. Bringing back Gucci’s ex-star designer could ease the $60 bln fashion giant’s reliance on its largest brand, which needs reinvigorating. Kering’s vast retail network would also make the Tom Ford label a winner.
BNP defies French banks’ interest-rate malaise 3 Nov 2022 The 60 bln euro lender’s top line is rising handily. That’s partly because CEO Jean-Laurent Bonnafé has tilted BNP Paribas away from Gallic retail banking, where regulations restrict its ability to earn more as rates rise. A valuation premium to local rival SocGen looks assured.
French protesters have a point on wages 20 Oct 2022 Inflation running at 10.9% is eroding European workers’ salaries. Companies benefitting from a power crisis, like 139 bln euro TotalEnergies, can afford pay hikes. For others, one-time bonuses are a better way to keep workers happy and cushion the downside of looming recession.
Total’s Russia foot-dragging is investor problem 18 Oct 2022 The French energy giant owns a stake in gas group Novatek, and is in theory entitled to a $430 mln dividend. CEO Patrick Pouyanné won’t say whether he’s selling. He may hope that long-held Kremlin ties can secure a clean exit, but the uncertainty is a shareholder concern.
Renault, Nissan messy breakup is least-bad option 10 Oct 2022 Signs that the $9 bln carmaker might cut a 43% stake in its Japanese partner hiked its share price. Renault CEO Luca de Meo’s gambit could mean more EV investment, but the French state would have to OK any reduction in its influence. Still, Renault has few good alternatives.
SocGen’s new insider CEO requires outsider mindset 3 Oct 2022 The French lender trades at a third of tangible book value – lower than almost all its rivals. Next boss Slawomir Krupa previously ran investment banking and eastern Europe, both of which arguably drag down its shares. Breaking with the past may require shrinking his old charges.
Vodafone’s new activist is mixed investor blessing 21 Sep 2022 French tycoon Xavier Niel bought 2.5% of the $34 bln telecoms company. That will cheer fellow shareholders, like Cevian Capital, who are pushing CEO Nick Read to simplify the group. Yet the risk is that Niel is more interested in getting hold of its Italian assets on the cheap.
Private jet crackdown is idea that could fly 25 Aug 2022 The French government is mulling clamping down on corporate flights, on both environmental and societal grounds. Whether it imposes punitive taxes or strict restrictions, the plan has few obvious downsides. It would be even more effective if other European countries hop aboard.
Paris and Berlin’s windfall tax timidity is futile 19 Aug 2022 France and Germany oppose a raid on firms profiting from the energy crisis. Berlin could borrow more, and President Macron has pledged not to hike taxes. Yet given it won’t make investors see either country as way more business-friendly, the reluctance makes little sense.
Big Pharma should brace for worst cancer outcome 18 Aug 2022 Investors have wiped $36 bln off Sanofi, GSK and its consumer spinoff on fears heartburn remedies cause cancer. The science implies an overreaction. But the scope for U.S. juries to see the saga as akin to Bayer’s Roundup weedkiller debacle could actually make the hit bigger.
Europe’s $6 bln space M&A is governance Death Star 25 Jul 2022 France’s Eutelsat and Britain’s OneWeb may merge to pool the cost of new broadband satellites. It de-risks things for UK shareholders, including the state, but Eutelsat investors hate it. Reconciling the interests of two governments and financial backers looks a thankless task.
France Inc could turn a profit from EDF takeover 7 Jul 2022 President Macron’s administration may have to fork out 7 bln euros for full control of the energy giant. But spinning off its renewable arm could recoup that cash. And the nuclear branch’s long-term investment needs and associated risks are more suited to public ownership.
Macron’s travails could turn into fiscal mess 5 Jul 2022 The French president’s electoral platform was bound to stress the state budget. Now a deadlocked parliament may only agree on increased spending and more tax cuts. With borrowing above 110% of GDP, and no credible plan to control public finances, Paris’s debt looks vulnerable.