Credit Agricole’s BES exit is predictably clumsy 5 Aug 2014 The French farmers’ bank has taken a 708 mln euro hit from the bailed-in Banco Espirito Santo. CredAg had been trying to manage an exit from its Portuguese stake to avoid a repeat of losses in Greece and Spain. But it still had to wait for BES to implode to make its departure.
French T-Mo bid looks like peak TMT Entrepreneur 1 Aug 2014 A debt boom has allowed TMT dealmakers like John Malone, Masayoshi Son and Patrick Drahi to finance their ever-bigger dreams. Now French billionaire Xavier Niel has made an unexpected $15 bln bid for 57 pct of Deutsche Telekom’s T-Mobile US unit. He risks over-reaching.
Flaky Iliad bid muddies T-Mobile US sale odyssey 31 Jul 2014 The $16 bln French telco has offered $15 bln for 57 pct of the No. 4 U.S. mobile operator. That’s bold, with financing not immediately to hand and the claimed premium reliant on improbable synergies. But the intervention may intensify antitrust objections to Sprint’s rival offer.
Only shareholders pay price for BNP’s sins 31 Jul 2014 The French bank has suffered its biggest-ever quarterly loss, at 4.2 bln euros, after a jumbo U.S. fine. BNP delivered a strong performance otherwise and says it has learned from the affair. And yet no one is being held accountable for the wrongdoing – or a weak valuation.
Mall rats join up to take on Zara and Amazon 29 Jul 2014 Klepierre is buying Corio, a weaker Dutch rival, for 7.2 bln euros including debt. That’s a reasonable price and will turn the French group into Europe’s biggest dedicated mall owner. With retail giants and e-commerce making life harder for shopping centres, scale matters.
Renault is showing a healthy turn of speed 29 Jul 2014 Demand is weakening in developing countries and there are some cashflow concerns. But the French car manufacturer is adding market share in Europe, its cost control is relentless, and profit margins are rising. Renault is well placed to move up through the global field of automakers.
Low-cost plan at Air France-KLM is a bad idea 25 Jul 2014 The Franco-Dutch carrier is mulling a move on Europe’s no-frills carriers. Air France-KLM has reaped rewards from a painful but mostly successful cost-cutting programme. It could undo the good work by challenging super-efficient budget airlines Ryanair and easyJet.
Club Med organisers can welcome latest arrival 22 Jul 2014 Andrea Bonomi’s Investindustrial is offering 790 mln euros for the all-inclusive holiday group. This may not be a five-star price but it blows a rival Franco-Chinese bid out of the water. And investors have spent years in the wilderness. This is an offer the board can recommend.
Publicis advertises its standalone weakness 22 Jul 2014 The ad giant’s first results since a merger with Omnicom collapsed were unexpectedly poor. Publicis shares tumbled. Claims the deal was about “opportunity, not necessity” ring increasingly hollow. Pressure to find a successor for CEO Chairman Maurice Levy is rising.
French persist in dead-end strong-euro moaning 8 Jul 2014 The Airbus CEO is the latest to complain about the strength of the single currency, echoing similar grumbles by the French prime minister a week ago. But the ECB is right: exchange rates can’t be a primary target of monetary policy.
No moral high ground in banks’ fight with U.S. law 2 Jul 2014 It’s reasonable to question America’s ability to use the dollar’s global status to impose its foreign policy on a recalcitrant world – and then go after lawbreakers like BNP Paribas. But the financial industry, whether offshore or on, isn’t credible enough to make the case.
Sarkozy probe latest sign of sick French politics 2 Jul 2014 A formal investigation for corruption and influence-peddling undermines the former president’s hoped-for comeback. His conservative party doesn’t offer a credible alternative to the unpopular ruling socialists. The EU’s second-largest economy is sinking into political paralysis.
U.S. cooks up penalties with anti-foreign flavor 1 Jul 2014 New research shows that overseas firms like BNP Paribas do in fact pay bigger fines and plead guilty more often than U.S. companies. One reason may be that prosecutors target only the most serious cases abroad. But the gaps feed suspicions that America is playing favorites.
BNP’s Prot should go 1 Jul 2014 The French bank has pleaded guilty to criminal wrongdoing and will pay a near-$9 bln fine to U.S. authorities. Chairman Baudouin Prot was CEO when BNP Paribas was helping clients evade U.S. sanctions. His position is untenable. In the name of accountability, he should resign.
Market gives BNP benefit of doubt on U.S. fallout 1 Jul 2014 Shares in the French lender have fallen more than 15 pct since it warned in February of U.S. action against sanctions abuses. Factor in market falls, and a near-$9 bln fine, and investors value the hit to BNP Paribas’ reputation and business at below $3 bln. That looks generous.
BNP’s reputation hit harder than its finances 30 Jun 2014 The French bank’s $8.8 billion fine for sanctions violations is bearable: it may even be able to keep paying dividends. A much-feared dollar-clearing ban is also likely to be defanged. But BNP’s guilty plea will batter its reputation as a conservative and cautious institution.
Next stop: Siemens-Alstom train merger 24 Jun 2014 Losing the competition for Alstom’s power assets was a blessing in disguise for the German engineering group. It can now focus fully on its internal restructuring. Fixing the ailing train unit is crucial. Hiving it off to Alstom itself could well be the best solution.
Investors beware: France will get more erratic 23 Jun 2014 Paris is to buy most of Bouygues’ stake in Alstom in an expensive concession by François Hollande to his protectionist economy minister. Weakened by his unpopularity, the president seems increasingly unable to bring cohesion to his own cabinet. It can only get worse.
GE scores a Pyrrhic victory in France 20 Jun 2014 The U.S. conglomerate has won the battle for Alstom’s energy businesses. It saw off nemesis Siemens and reached a truce with a hostile French state. Yet here’s a paradox: this is a clearer victory for Paris and Alstom than for GE itself. And it’s not all bad for Siemens either.
GE remains the best bet for Alstom’s board 20 Jun 2014 Rival bids from GE and Siemens for Alstom’s energy business have converged in terms of cash, complexity, political acceptability, and Alstom’s future structure. This is not conventional M&A, so the outcome is unpredictable. But GE’s bid remains simpler, and richer in cash.