French banks hope to end balance-sheet shrinking 4 May 2012 BNP and SocGen’s results showed the strains of aggressive deleveraging in the first quarter. BNP should reach its Basel III capital target this year, 18 months ahead of its smaller rival. But it’s also more vulnerable to a possible worsening on the euro front.
Hollande opts for non-dangerous euro policy 3 May 2012 In his TV debate with Nicolas Sarkozy, the French socialist and presidential favourite presented a moderate version of what he wants to “renegotiate” in the euro fiscal compact. He wants the EU to agree on some limited reforms - most of which are already in the pipeline.
French vote opens new phase of euro zone crisis 23 Apr 2012 A majority of French voters in the first round of the presidential election rejected the European recipe of reforms and austerity. The general “non” aided the ultra-right National Front, gave the Socialist Hollande the lead - and will influence the next president’s policies.
Hollande presidency bound for rocky start 20 Apr 2012 The French socialist leader has been mostly mum on the country’s major economic problems - excessive public spending and high labour costs. He’ll need to pay more than lip service to fiscal discipline before financial markets - and Germany - start taking him seriously.
IMF’s euro gloom points to right fiscal path 18 Apr 2012 Spain, France and Italy won’t be able to meet their fiscal targets next year, according to the latest IMF forecast. This is a wake-up call for both austerity fundamentalists and insouciant spenders. Fiscal discipline remains a must. But too much, too fast could be lethal.
Int’l Power does well to get better buyout from GDF 16 Apr 2012 The power generator’s board has won a 7 pct sweetener from GDF Suez in exchange for agreeing to an $11 bln minority buyout. It’s a decent result for International Power’s 30 pct outside shareholders, given wobbly markets and GDF’s majority.
Rothschild Anglo-French union secures family grip 5 Apr 2012 The investment bank is merging its French and British subsidiaries into a single listed vehicle, Paris Orleans. But the new group’s limited partnership structure guarantees airtight family control - regardless of who takes over from current chairman David de Rothschild.
Int’l Power non-execs have some leverage over GDF 30 Mar 2012 The UK energy firm has had a 6 bln stg approach from GDF for the 30 pct that the French group doesn’t own already. Bid rumours have already effectively added a slim premium to IPR shares. But its independent directors still have some power to push for a bit more.
North Sea blowout hardly justifies Total meltdown 28 Mar 2012 An out-of-control gas well off the UK coast has wiped 8.5 pct off the French oil major’s share price in three days. After BP, investors have acute fears about runaway deep sea disasters. But the reaction so far looks excessive.
Watchdogs could change Vivendi’s EMI tune 23 Mar 2012 The French group’s Universal music arm feels so good about its chances of success that it agreed to pay the full $1.9 bln price even if trustbusters block the deal. But it’s actually a third possibility - being forced to sell pieces - that could be the costliest for Universal.
Qatar forms a taste for foreign strategic assets 15 Mar 2012 After eyeing European aerospace and defence firm EADS, Qatar has snapped up a $2.6 bln stake in French oil major Total. That is a poor diversification of the Gulf state’s hydrocarbon wealth. But it might be an effective way for Qatar to shore up influence with its gas customers.
Hugo Dixon: Hollande’s sins more those of omission 12 Mar 2012 The probable next French president’s promises to cut the pension age to 60, tax the rich at 75 pct, renegotiate Europe’s fiscal treaty and launch a war on bankers aren’t as bad as they look. The real problem is he isn’t addressing the need to change the old welfare model.
Peugeot’s $1.3 bln cash call inspires confidence 6 Mar 2012 Underwriters sought a 32 pct discount to the theoretical ex-rights price for the carmarker’s fundraising in its alliance with GM. That seems steep, but reflects a challenged industry. Indeed, for a company raising a third of its market value, the 6 pct share price drop is muted.
Apax finds French twist on bankruptcy tourism 5 Mar 2012 Buyout house Apax may use French law to weaken creditors’ hands in a debt restructuring. It is risky, and may draw accusations of opportunism. But this novel twist on the way continental companies relocate to the UK to use its bankruptcy law may appeal to other buyout firms.
French left courts disaster with 75 pct tax plan 29 Feb 2012 The proposal of socialist presidential contender François Hollande to tax income above one million euros a year at 75 pct is bound to backfire. Either he’s serious – and French business will suffer. Or he’s not – and he’s on the way to a massive loss of credibility.
GM needs better ideas for Opel than Peugeot deal 28 Feb 2012 Europe suffers from overcapacity in cars. It’s not at all clear how spending $325 mln for a minority stake in its struggling French rival changes that dynamic, particularly given GM’s history. The deal only makes sense as a precursor to gut-wrenching consolidation.
Veolia board coup attempt just a bad French farce 23 Feb 2012 Nicolas Sarkozy and Henri Proglio, the former chief of Veolia, are reported to be pressuring the water company’s board to oust current CEO Antoine Frerot. Whatever the latter’s merits, the episode looks to exemplify some of France’s worst political and business habits.
GM tie-up could keep Peugeot family at the wheel 22 Feb 2012 The French carmaker had to do something after burning through 1.5 bln euros of cash in six months. It needs greater scale to take on Volkswagen. Fiat was a potential partner. But a non-equity tie-up with GM is a way to let the Peugeot family to keep control.
French banks face tough 2012 after rocky 2011 16 Feb 2012 After a tumultuous second half, BNP Paribas and SocGen may be happy for now to prioritise balance sheet repairs over returns. But despite abundant ECB liquidity, the double threat of an economic slowdown and a bank-bashing new president means 2012 may not be more comfortable.
Hollande’s plan points France in wrong direction 27 Jan 2012 The socialist presidential candidate does endorse worthy fiscal targets, but his plan to meet them is long on tax hikes and short on spending cuts. His policies would not tackle France’s biggest economic problem, a lack of competitiveness. They might make it worse.