Germany

Trade war tariffs eat Daimler’s homework

21 June 2018

The carmaker’s tariff-induced profit warning is odd, since Chinese duties would hit U.S. cars but not imports from elsewhere. Daimler’s statement could cover for poor performance, or make a political point about a trade war’s costs. Expect other companies to try the same.

Apple supplier’s M&A bite looks too much to chew

20 June 2018

British chipmaker Dialog is eyeing U.S. touchscreen group Synaptics. That would help it diversify away from main client Apple, which recently cut orders, and the returns look good. Yet funding a winning bid may mean taking on a slug of costly debt or raising equity.

DIY approach weakens Europe’s migration defences

19 June 2018

Fewer people are coming from Africa, but managing immigration is the EU’s main political issue. A unified push to screen refugees in third countries could help prevent a full-blown crisis. By contrast, piecemeal solutions in Germany and Italy would be costly and ineffective.

Audi arrest puts brakes on VW’s reform drive

18 June 2018

The head of Volkswagen’s luxury brand is being held over fears he may hinder an investigation into emissions cheating. The question is why the long-serving executive still had his job. The carmaker’s messy governance is still hindering new boss Herbert Diess’ cleanup operation.

ThyssenKrupp can forge better steel deal with Tata

14 June 2018

The German group has outperformed its Indian rival since they agreed a European steel joint venture last year, and now produces more than twice as much EBITDA. Tata could pay cash or give up dividends to close the gap. Walking away from the hefty synergies would be too painful.

Deutsche Bank’s misleading CDS hide a wider truth

12 June 2018

The cost of insuring the German bank’s debt has doubled this year and unlike peers stayed elevated after recent Italian tensions. In the short term this doesn’t affect Deutsche’s funding as much as it might look. But it still highlights the weakness of the lender’s outlook.

USG pokes hole in U.S.-Europe trade drywall

11 June 2018

The building products outfit agreed to a $6.1 bln takeover by German rival Knauf. It did well to get a 5 pct top-up given 31 pct owner Warren Buffett was already on board. In the wake of a rancorous G7 it shows companies can still transact when politicians keep out of the way.

G7 risks becoming G-zero without consensus

7 June 2018

President Donald Trump is the sore thumb among leaders meeting in Canada on Friday. Last year’s G7 pledges were already watered down, and he hadn’t then left the global climate accord or started erecting trade barriers. The forum loses relevance if it lacks U.S. economic backing.

Uber may find four wheels just as bad as two

7 June 2018

The car-share app plans to run electric cycles in Europe. Logical as it sounds given Uber’s transport expertise, it will lumber the company with troublesome assets, add fresh regulatory risks from city officials, and it could torch cash. The worst part: Uber has little choice.

Hadas: Financial freedom is not what Italy needs

6 June 2018

Leaving the euro would give the country two poisoned gifts: a sinking currency to reduce pressure for durable reforms and fiscal deficits generating inflation and waste. Extra government spending can help create jobs, but only under certain conditions. These don’t apply to Italy.

Angela Merkel’s euro reform plan is inadequate

4 June 2018

The German chancellor wants an investment budget that would help poorer countries and a souped-up bailout fund. The ideas are a pale imitation of French leader Emmanuel Macron’s proposals. With monetary policy exhausted, the euro zone looks ill-prepared for the next crisis.

Bayer M&A magic beans are cheaper but less fertile

4 June 2018

The German group’s acquisition of seed-maker Monsanto finally won regulators’ approval. The lengthy antitrust process and disposals mean Bayer is paying $3 bln less than expected and raising less equity. But it won't be able to cut as many costs, and the return is still sparse.

Viewsroom: Who will win the World Cup?

31 May 2018

Germany may not be the bookies’ clear favorite to lift the trophy. But a data dive into player values, population and other factors predicts the team will emerge victorious. Meanwhile, Italy stages an economic and political comic opera. Plus: Ant Financial’s $10 bln kitty.

Penalty box hastens Deutsche’s Wall Street retreat

31 May 2018

Being branded “troubled” by the Federal Reserve, as the WSJ reported, is hardly the first stateside warning for the German lender. New CEO Christian Sewing already plans to slim the American business. Worried U.S. supervisors will give him a greater sense of urgency.

EU has political trump card in trade conflict

31 May 2018

The United States is imposing steel and aluminum tariffs on Germany and others. Europe has threatened levies against Harley motorcycles and Kentucky bourbon, among other goods. That hits Republican leaders’ bases as the party faces elections in November. It’s a smart tactic.

Investors risk whiplash in car parts M&A standoff

31 May 2018

Shares in German headrest maker Grammer are trading 10 pct above an offer from Ningbo Jifeng. That’s optimistic. A big Bosnian investor is unlikely to counter-bid, and the Chinese group just needs another 25 pct to win control. Selling in the market may be the safest option.

China is winner in German-Bosnian governance fight

29 May 2018

Manufacturer Ningbo Jifeng may offer to buy out other shareholders of Bavarian auto supplier Grammer. The Chinese group is offering a tiny premium and should make a healthy return. But a lowball exit may appeal to investors weary of a boardroom spat with Bosnia’s Hastor family.

World Cup Soccernomics

29 May 2018

Who will lift soccer’s ultimate trophy in Russia this summer? Breakingviews ranked the 32 contenders according to player values, population, home support, and participation in the sport. Put them all together, and Germany is best placed to successfully defend its crown.

Numbers add up to Germany retaining World Cup

29 May 2018

Who will lift soccer’s ultimate trophy in Russia this summer? Breakingviews ranked the 32 contenders according to player values, population, home support, and participation in the sport. Put them all together, and Germany is best placed to successfully defend its crown.

Deutsche Bank de-flabbing cuts to the bone

24 May 2018

The German lender plans to cut more than 7,000 jobs by 2019, including a one-quarter reduction in equities trading headcount. It’s a bold move by boss Christian Sewing to get costs to 22 billion euros. It could also end up damaging Deutsche’s more profitable investment banking businesses.