RWE has a way out of its valuation hole 14 Mar 2024 The $26 bln German power utility has lost 22% of its market value this year. Low gas prices, higher rates and a lingering presence in polluting lignite are reasons why. The first two ought not to persist as headaches, and the last is something RWE could do more about.
Adidas catch-up remains off the necessary pace 13 Mar 2024 The $37 bln sneaker maker is emerging from its Yeezy trainer crisis. CEO Bjorn Gulden’s focus on fashionable trainers is helping to grow sales. But given the ropey economic outlook, which is hitting rival Nike, investors don’t yet look convinced he can deliver on his ambitions.
Bayer’s inertia will make mounting problems worse 5 Mar 2024 The $30 bln seeds and drugs maker has ruled out a rapid breakup. Bayer could have used a consumer health sale to cut debt and offset bigger US litigation costs. Betting instead that it can grow its way out of trouble risks exacerbating a yawning discount to the sum of its parts.
Cosmetics IPO application calls for a steady hand 4 Mar 2024 Buyout firm CVC is braving uncertain markets to list retailer Douglas, possibly for 7 bln euros. Shoppers’ appetite for premium makeup despite inflation is a positive sign. Yet the group’s high leverage and competition from Sephora call for a valuation discount to US rival Ulta.
European telcos’ new deal hopes face reality check 1 Mar 2024 Executives gathered in Barcelona this week to plead for lighter regulation, cheaper spectrum and some financial help. Policymakers are unlikely to agree. Deutsche Telekom, Telefónica and others will have to convince investors that future growth requires more investment today.
European bank property buffers rest on two big ifs 28 Feb 2024 Lenders like BNP and ING sit on $1.5 trln of commercial property loans, which look vulnerable to high interest rates. Longer leases give EU players more breathing space than US counterparts. Yet averting a crisis requires a mixture of falling inflation and a revival of offices.
Europe defence requires more than a $75 bln boost 16 Feb 2024 Non-US NATO members will spend 2% of GDP on their militaries in 2024. Yet the extra $75 bln a year it entails remains below what Europe will need. Ukraine, technological advances and US wavering mean their true requirement is more like 3% of their output.
Renk’s IPO bang masks troubled world 7 Feb 2024 Shares in the German tank-gearbox maker soared 23% on the first day of trading. That and the Athens airport operator’s strong market debut suggest calmer IPO waters. Yet Renk’s success stems from heightened geopolitical tensions. That should keep investors on alert.
Deutsche Bank and BNP try on each other’s clothes 1 Feb 2024 The $27 bln lender is less highly valued than its $72 bln French peer and its recent past is more troubled. But Deutsche just upped its outlook, while BNP’s got worse. Neither are investor stars, but the German bank’s ambitions for its investment bank look easier to realise.
Shipping giants can withstand Red Sea crisis 30 Jan 2024 Houthi attacks near the Suez Canal are slowing global trade. In this Exchange podcast, Zvi Schreiber, CEO of shipping platform Freightos, discusses how the sector was caught by surprise, but excess container ships and more air cargo capacity are helping limit the immediate pain.
Commerzbank stake sale would risk M&A impasse 25 Jan 2024 Berlin may consider offloading its 15% stake in the German lender. Deutsche Bank and UniCredit are obvious potential buyers, but higher rates have made a full-blown bank merger less appealing. A market disposal would present prospective suitors with a dilemma.
CVC’s German perfume float may fail the smell test 15 Jan 2024 The buyout fund wants to list beauty retailer Douglas in Frankfurt, valuing its equity at roughly 7 bln euros. It’s time for CVC to offload an asset it’s held since 2015. But high debt and slower online sales than peers are reasons for investors to turn up their noses.
Prolonged Red Sea attacks can hurt global economy 11 Jan 2024 Freight costs are soaring as militants target ships on a crucial trade route. In this Viewsroom podcast, Breakingviews columnists debate how inflation could rise and which companies could suffer if the tensions aren’t resolved soon.
Red Sea windfall will only delay shippers’ pain 4 Jan 2024 Maersk and Hapag-Lloyd have gained some $18 bln in market value, as militant attacks shut the Suez Canal and caused freight rates to soar. Yet investor hopes for a lasting boost may be disappointed. And carriers will still face a reckoning from a weak economy and idle fleets.
Intel becomes proxy for Biden’s America Inc 27 Dec 2023 The chip giant’s $3.2 bln subsidy to build a plant in Israel follows similar outlays from the USA and Germany. The investment loop is a unique boon to shareholders: President Biden wants to build an allied semiconductor supply chain to fend off China; he must use Intel to do so.
Wintershall saga reaches logical $11 bln endgame 21 Dec 2023 After flirting with a listing and rival suitors, the BASF-owned German oil group is to merge with $3 bln Harbour Energy. The UK-listed buyer gets a relatively cheap way to bulk up in gas assets. The sellers get to stick around for the ride, courtesy of some funky financing.
ADNOC German oil deal has bad timing, good logic 28 Nov 2023 Abu Dhabi’s energy giant may bid for BASF-owned Wintershall, in a deal worth $11 bln. As the UAE prepares to host the COP28 climate shindig, that’s a bad look. But buying the German group’s pipeline network may suit ADNOC’s wider aim to bulk up in European petrochemicals.
German budget crisis will haunt economy for years 24 Nov 2023 Berlin will suspend its "debt brake" this year, after a court decision cancelling 60 bln euros of spending. Yet the crisis will leave Germans even warier of much-needed public investment. That will hit long-term growth, and worsen the ailing economy’s short-term woes.
Bayer drug fail is symptom of growing breakup pain 20 Nov 2023 Shares in the 33 bln euro group fell 20% after it aborted a late-stage trial. Given drugs regularly fail, that’s excessive. Instead, investors’ main concern could be that a grim pharma outlook and litigation risk in Bayer's seeds unit mean a planned split may release less value.
Legal blow makes Germany and Europe sicker 15 Nov 2023 Berlin’s top court blocked the government’s use of creative accounting for investments. That may jeopardise Chancellor Olaf Scholz’s $65 bln growth fund and mean less money for the energy transition. Europe’s biggest economy may also want more fiscal rigour from its EU peers.