Germany

Jens Weidmann’s best replacement is another hawk

20 October 2021

The Bundesbank president has unexpectedly resigned. Weidmann criticised Mario Draghi’s bond-buying plan, and a more dovish rate-setter could help the ECB keep policy loose in tricky times. But having an articulate and critical representative also helped keep German voters happy.

Private equity’s German bank raid targets IT jewel

14 October 2021

Advent, Centerbridge and TowerBrook have bid 1.7 bln euros for Wiesbaden-based Aareal. Despite its dismal profitability, the target’s appeal lies in its fast-growing digital real estate unit. That could on its own cover the cost of the deal, making the humdrum bank a freebie.

EQT $3.9 bln pet bid typifies PE growth obsession

27 September 2021

The Swedish buyout firm topped Hellman & Friedman’s offer for online dog-food seller Zooplus. An absence of debt funding and limited scope for cost cuts mean the numbers only work if sales grow at a greyhound-worthy 15%. A possible counteroffer would stretch things even further.

Close German vote dilutes economic reform hopes

26 September 2021

Socialist Olaf Scholz and his centre-right rival, Armin Laschet, will each woo the fiscally conservative Free Democrats in a bid to form a government. The tight election result hands the FDP leverage that may limit scope for big green investments and more supple EU budget rules.

Buyout sweeteners are symptom of limp boards

14 September 2021

Hellman & Friedman offered 18% more for Zooplus a month after the German retailer backed a $3.5 bln takeover. Blackstone and CD&R also paid more for listed targets than initially intended. Recommending a bid can flush out rival suitors. But boards should be negotiating harder.

RWE makes for a good coal wind-down guinea pig

10 September 2021

The 22 bln euro German utility’s new activist wants it to ditch carbon-intensive lignite assets faster. If the government wants to hit tougher CO2 emissions targets, RWE will have to. The least-bad way forward may be for Berlin to assume the offending power plants itself.

German election offers more continuity than chaos

8 September 2021

A three-way coalition may lead the EU’s largest economy after September’s poll. A grouping of left, right, or green lawmakers could take months to form and shirk reforms at home and in Europe. Climate change and the pandemic aftermath will still shape policy for the better.

D.Telekom finds good route to poor destination

7 September 2021

The 85 bln euro German carrier is upping its stake in T-Mobile US by 5% to near-majority ownership. Doing so via a share swap with Japan’s SoftBank is better than handing over $8 bln in cash. Yet it exacerbates the problem of DT investors valuing U.S. assets at a discount.

VW-style tech hype calls for defensive driving

6 September 2021

CEO Herbert Diess says the “gamechanger” for his industry will be software and autonomous cars, with the former a $1.4 trln global market by 2030. Such a Panglossian take relies on fleets of robo-taxis and driver-downloads galore, plus manoeuvring past tech leaders like Alphabet.

DWS greenwash probe could be ESG tipping point

26 August 2021

The German asset manager’s shares slumped 12% amid a U.S. investigation into alleged overstatement of its green credentials. A lack of consistent ESG metrics and terminology is a long-running, sector-wide problem. The desire to avoid similar attention could fast-track a cleanup.

Sex toy unicorn gets into the wellness fetish

20 August 2021

UK online vibrator seller Lovehoney is buying Germany’s Wow Tech to form a $1.2 bln “sexual wellbeing” group. Their punters love e-commerce and aren’t too price sensitive, boosting margins. Asian markets are also losing their scruples. An IPO would be the ultimate taboo breaker.

Faurecia’s German car-parts deal has firm chassis

16 August 2021

The French automotive supplier edged out its rivals with a 6.7 bln euro bid for Lippstadt-based Hella. Annual savings worth 15% of its target’s R&D and marketing costs justify the outlay on their own. Any sort of sales boost would amount to go-faster stripes and alloy wheels.

Private equity barks up right pet-makeover tree

13 August 2021

Hellman & Friedman is splurging $3.5 bln on unloved German pet food supplier Zooplus. The online retailer is crying out for more investment and better management to cash in on the e-commerce and pet-ownership booms. Even with minimal debt, returns could turn out best in show.

Delivery Hero’s side gig does it few favours

12 August 2021

The German group spent $300 mln on a stake in Deliveroo, taking its investments in rivals to $2.7 bln. The bets look a distraction for a $28 bln food delivery company whose operations are devouring cash. Besides, investors are hardly rewarding CEO Niklas Oestberg’s efforts.

German property deal rejig risks messy stalemate

6 August 2021

Landlord Vonovia got the nod from regulators to submit a new $23 bln offer for peer Deutsche Wohnen. Its last bid was scuppered by hedgies hoping for a higher price. A skimpy premium means it may still not get enough shares to take full control, leading to a lengthy standoff.

Allianz’s DOJ tangle will mostly hit M&A ambitions

2 August 2021

The $95 bln insurer’s shares fell 10% after it warned a U.S. Department of Justice probe could materially impact earnings. Allianz boss Oliver Baete has a sturdy enough balance sheet to withstand a substantial hit. It may mean fewer deals to augment his growth strategy, though.

Volkswagen makes timid bet on brave new car world

29 July 2021

A group led by the German carmaker will pay $3.4 bln for Europcar. The rental company’s city sites may help CEO Herbert Diess sell new services like subscriptions and self-driving taxis. But keeping the unit at arm’s length suggests caution at odds with the optimistic vision.

Cost control gives Barclays edge over Deutsche

28 July 2021

Robust capital markets helped boost both lenders’ earnings in the first half. But the German bank run by Christian Sewing likely needs top-line growth to hit its 2022 profit goal. Rival Jes Staley’s tighter efficiency means the UK group is less reliant on unreliable revenue.

Hedgie stumble takes German M&A to surreal heights

26 July 2021

Investors sank landlord Vonovia’s $21 bln Deutsche Wohnen offer, even though they wanted it to succeed. Too many sat on the shares, hoping for a fatter payout courtesy of Berlin’s odd takeover rules. While the deal may be salvageable, it’s a clear sign of the need for reform.

Greener anti-flood investments will be win-win

26 July 2021

Germany’s worst natural disaster in decades and deluges in China have sparked calls to build more dams and reservoirs. There are better ways to protect people, land and buildings from both too much and too little water. These alternatives will also appeal to investors.