Germany

Deutsche CEO will dust off Commerz merger in 2021

28 October 2020

Despite a recent trading boom, boss Christian Sewing will soon have to scrap his 2022 profit target. Since further cost cuts are tricky, reviving a 2019 aborted union with Commerzbank is the logical Plan B. It helps that his bank is now healthier, and regulators more forgiving.

Daimler bags lux joyride on Aston Martin’s dime

28 October 2020

The $59 bln Mercedes-maker has traded some of its technology for a 20% stake in the James Bond marque as part of a wider 1.2 bln pound rescue. In return for access to battery-operated cars, CEO Ola Kaellenius gets a free option on a super-premium brand. It’s a trip worth taking.

Bayer’s M&A comeback is reassuringly expensive

26 October 2020

The drugs-to-seeds company is buying gene therapy specialist Asklepios BioPharmaceutical for $4 bln. It’s a rich price, but the German group needs to offset patent expiries and shake off the disastrous Monsanto deal. Expanding in a rapidly growing sector offers some protection.

SAP’s shifting goalposts puncture Covid-19 hopes

26 October 2020

CEO Christian Klein scrapped his 2023 financial targets, wiping 20% off the $174 bln giant’s market worth. New 2025 goals imply a large pandemic-induced boost to cloud computing, which may merit a higher multiple. Investors smarting from Monday’s selloff are apt to wait and see.

Renault acceleration just leaves it further adrift

23 October 2020

Strong pricing means the French carmaker now forecasts positive free cash flow for the second half of 2020. But German rival Daimler’s greater Chinese presence means its operating profit for the year will be level with 2019. Worse, Renault doesn’t even look particularly cheap.

Thyssenkrupp has strong hand in European steel M&A

16 October 2020

The $3 bln German conglomerate received an offer from Liberty Steel, with no price divulged. The good news for Thyssenkrupp investors is that the bid may prompt rival offers. Even better, the cash from a recent elevator sale gives it the time to wait for the best price.

VW bid for Tesla’s crown rests on shaky optimism

14 October 2020

The German carmaker has launched its first mass-market electric SUV to take on Elon Musk and hit CEO Herbert Diess’s goal of selling 3 mln EVs by 2025. VW has scale and is big in China. But Tesla has 15 years of battery know-how and no legacy auto business. It gives Musk an edge.

Daimler drives into faster lane with luxury refit

6 October 2020

The German automaker plans to cut costs by 20% at its Mercedes brand by 2025 and double sales of Maybach luxury cars. Hitting the goals could grow operating profit by nearly two-thirds. Even so, boss Ola Kaellenius may at best catch up with, rather than overtake, rival BMW.

Bayer’s dismal M&A harvest boosts breakup pressure

1 October 2020

The German drugs-to-seeds company’s shares collapsed after it said earnings will fall next year. On top of legal woes from the Monsanto acquisition, the crop science business has been hit by the virus, and tough competition. The case for separating its sickly units is growing.

Preferred wheels of nouveau riche worth a fortune

1 October 2020

Volkswagen is mulling a sale of Lamborghini, the beloved marque of crypto-traders and youthful sheikhs, Reuters reports. It might fetch $8 bln – a fat return on the reported $100 mln VW paid in 1998. CEO Herbert Diess’s battery-car focus makes disposing gas guzzlers an easy call.

Daimler’s new driver can jump-start electric drive

28 September 2020

Ex-CEO Dieter Zetsche is not taking charge of the $55 bln Mercedes maker’s supervisory board. That’s a rare win for critical shareholders. Still, the company’s plans to almost double its share of battery cars are behind rival BMW. Daimler could use an outsider at the wheel.

Siemens energy spinoff emits faint value pulse

24 September 2020

The 96 bln euro engineer’s energy carve-out is a curious mix of wind and hydrocarbons. Worth perhaps 17 bln euros, it will barely dent Siemens’ chunky conglomerate discount. For that, CEO-in-waiting Roland Busch needs to take a bigger knife to the remaining corporate sprawl.

Navalny cloud may yield green energy silver lining

22 September 2020

A suspected Novichok attack on the Kremlin critic further complicates German links to Russia via the new Nord Stream 2 pipeline. For now, gas needs mean Berlin can’t bow to U.S. pressure to ditch the project. But it should add impetus to the drive for alternative energy sources.

Icahn can’t push VW too much on Navistar bid

17 September 2020

The U.S. truck company in which the activist holds 17% wants Volkswagen to raise its $4.3 bln bid. Savings potentially worth almost as much mean the automaker run by Herbert Diess can pay more. But falling sales and cash outlays mean shares could fall sharply if the Germans walk.

VW hands Carl Icahn muted Navistar victory

10 September 2020

The activist managed to push the German carmaker’s truck division to raise a cash bid for its U.S. rival by 23%. Given the sector faces a deep market decline, it may be a good time to exit. Still, the scale of VW’s potential synergies mean it could afford to give further ground.

Rocket’s $3 bln delisting leaves investors adrift

1 September 2020

Even as tech stocks surge, Oliver Samwer’s German investment vehicle has concluded it doesn’t belong on the public market. His plan to take Rocket Internet private gives small shareholders two unappealing options: cash out with no premium or hang on with little hope of liquidity.

Delivery Hero M&A feast is DAX-doubtful

27 August 2020

The $18 billion food delivery company is buying its way into new, unproven businesses. It just replaced the fraudulent Wirecard in the German blue-chip index, not usually the home of unprofitable and highly acquisitive startups. Expect some adventures.

Swiss outsider has a chance in Borsa Italiana race

27 August 2020

Deutsche Boerse and Euronext have been favourites for buying the Milan exchange operator, worth at least 3 bln euros. Unlisted SIX has deep pockets, big ambitions, and tolerance for lower returns. Despite a non-EU base, it could be a worthy contender.

German union will get half its four-day-week wish

26 August 2020

IG Metall wants to save jobs by cutting workers’ hours, but without proportional pay cuts. Shorter workweeks make sense for employers, staff and the economy. The per-hour wage hike only suits employees. Dire growth prospects give bosses the upper hand in negotiations.

Covid market fervour derails $13 bln lab test deal

13 August 2020

Thermo Fisher Scientific scrapped a bid for German diagnostics group Qiagen after investors balked. The takeover was tabled in March, but the offer looked low once Covid-19 hopes boosted testing groups’ valuations. The U.S. company’s retreat suggests insiders are less gung-ho.