Germany

The Exchange: Anshu Jain

15 October 2018

Deutsche Bank was credited with coming through the 2008 crisis in better shape than many of its rivals. Jain, who rose from running the German lender’s global markets business to eventually become CEO, stopped by Times Square to speak with Rob Cox about the state of finance.

BMW writes China JV owner manual for its rivals

11 October 2018

The luxury carmaker will take control of its venture with Brilliance Auto for $4.2 bln, making it the first to take advantage of new rules. Share weakness has helped it drive a bargain, even if the deal doesn’t close until 2022. Others like Daimler may follow in the slipstream.

German retail flop is cautionary tale for spinoffs

9 October 2018

Electronics group Ceconomy reported a third profit warning, a year after being hived off from Metro. Thin margins, tough markets and creaky governance mean shareholders’ ordeal won’t end soon. With groups like Thyssenkrupp and VW eyeing splits, it’s a reminder of how not to do it.

Activists may soon arrive by truckloads to Germany

9 October 2018

Whether uppity investors will rattle the cages of VW and Daimler depends on how they separate their commercial-vehicles arms. Resorting to standard, crummy German governance through partial listings, rather than clean-break spinoffs, will earn them the enmity of investors.

Thyssenkrupp gets half a breakup

27 September 2018

The German conglomerate’s shares surged on plans to split the company in two. Thyssenkrupp’s businesses are probably worth more apart than together. But the separation will take time, and one of the units will still have a stake in the other.

Daimler’s new CEO to drive without steering wheel

26 September 2018

Ola Kaellenius, Mercedes’ head of development, will in 2019 replace Dieter Zetsche. The chief executive of 13 years will return as chairman in 2021. The risk is that Kaellenius will be hamstrung in the interim. The carmaker can ill afford to be stuck in neutral for two years.

Cull of bank traders is on the cards

26 September 2018

Global fixed income trading revenue has fallen faster than headcount over the past four years, according to Coalition. Pressure is growing on banks, especially in Europe, to cut costs. Technology will replace more humans on the dealing floors.

BMW justifies carmakers’ slow lane valuation

25 September 2018

Investors fled the sector this year on trade-war fears and new emission rules. At around six times earnings, Europe’s automakers were starting to look cheap. The German group’s profit warning, however, is a reminder of carmakers’ limitless capacity to generate bad news.

Versace gives Blackstone a suitably flash exit

24 September 2018

Fashion group Michael Kors may pay 2 billion euros for the Italian label. The deal adds a high-profile name to CEO John Idol’s growing stable of luxury brands, but may take years to pay off. Minority investor Blackstone has stitched together a clean sale, and respectable return.

Rocket half-heartedly recognises SoftBank gravity

20 September 2018

Despite recent successes, the $5 bln German tech investor still languishes below its listing price. Rocket Internet also faces SoftBank’s $100 bln Vision Fund pushing up M&A values. Hence spending dry powder on a share buyback makes sense – though investors may have wanted more.

German giant adds heft to IPO starting line

17 September 2018

The billionaire owner of Knorr-Bremse plans to sell shares in the maker of brakes for trucks and trains. Outside investors will get little say, making a mooted $14 bln price tag ambitious. Yet the reassuringly solid business marks a welcome shift from dicey European offerings.

Europe’s $50 bln payment upstarts can justify hype

10 September 2018

Investors can’t get enough of groups like Wirecard, which is replacing Commerzbank in Germany’s main stock index. As with peer Adyen, the risk is that a crowded sector caps growth. To hit their targets, the pair need to double their share of the payments pie. That’s doable.

Pimco finds finance role robots can’t yet play

5 September 2018

John Studzinski, a Blackstone consigliere and consummate networker, is joining the bond fund manager to help woo rich and powerful investors. Pimco, like its rivals, is investing in big data and machine learning, but hiring “Studs” shows the high-touch stuff still matters too.

Bayer’s lowly valuation lacks positive catalyst

5 September 2018

The German drugs-to-seeds maker’s sales rose 9 pct in the second quarter, helped by its pricey acquisition of Monsanto. That deal is tarnished by lawsuits, while Bayer’s consumer and pharma units also face challenges. Though the bad news is priced in, the discount will persist.

Gas mega-merger hubris deflated by regulators

22 August 2018

Linde needs to sell more assets to close its $83 bln tie-up with Praxair. That means hurried disposals and fewer savings. The rationale for creating the world’s largest gas supplier holds, but the mess shows shareholders should apply a hefty discount to ambitious dealmaking.

BMW has good reason to take driver seat in China

20 August 2018

The German auto group may raise its stake in its Chinese JV, after the state moved to scrap foreign ownership rules. Spending $3.6 bln now would boost margins and give it a greater share of profit from China-made cars. That’s particularly valuable given U.S. trade tensions.

Bayer’s cancer scare makes a bad deal worse

13 August 2018

The German group's market value fell nearly $10 bln after a court awarded $289 mln to a user of weed killer made by U.S. division Monsanto. That may overstate the likely losses, but the verdict undermines a deal that already destroyed value, and left shareholders without a say.

Thyssenkrupp makes investors slightly less angry

9 August 2018

The ailing German conglomerate’s boss Guido Kerkhoff has set margin targets for its various businesses, after shareholder pressure. It’s a start, but the group has missed goals before. And Kerkhoff’s interim status makes it harder to tackle more radical solutions, like a breakup.

Commerzbank M&A pressure respite is only temporary

7 August 2018

The German lender reported a 689 million euro first-half pre-tax profit, compared to a loss in 2017. Higher revenue from smaller businesses should help it reinstate payouts. Still, a modest 6 percent return target means a merger with Deutsche Bank still makes long-term sense.

New rules will spoil India’s e-commerce party

3 August 2018

A draft plan to force online retailers to limit discounts, among other things, shields mom-and-pop stores from competition and strikes a nationalist tone. That could dramatically upset the strategies of Amazon and Walmart and leave India's marketplace looking rather Chinese.