Germany

Germany’s EU views will get Green jolt post-Merkel

20 April 2021

Armin Laschet, the ruling Christian Democrats’ pick to run for chancellor, will almost certainly have to share power with the increasingly popular pro-European Greens. Such a coalition would bode well for a sensible reform of the bloc’s fiscal rules and common debt issuance.

SAP’s nice surprise makes case for value discount

14 April 2021

The $166 bln German IT group is wooing customers to its cloud software, boosting revenue. Yet investors aren’t giving CEO Christian Klein much credit. It’s hard to predict when clients will roll off SAP’s old-school products. A track record of shifting targets doesn’t help.

Covid-testing IPO is bet on long hypochondria

7 April 2021

German diagnostic tester Synlab is planning to float with a mooted $7 bln valuation. A receding pandemic may mean its 38% revenue growth in 2020 isn’t repeated. But the price reflects that, and consumers may well continue to obsess about other aspects of their health.

ESG wave crashes into Volkswagen’s narrow straits

26 March 2021

U.S. eco-investors have pushed ordinary shares in the $153 bln automaker way above equal preference stock after CEO Herbert Diess upgraded battery car plans. Investors’ need for voting rights plus VW’s small free-float may explain why. But the lack of clarity invites a snapback.

Allianz leaps back into M&A game in pricey Poland

26 March 2021

Europe’s top insurer will buy Aviva’s Polish unit for 2.5 bln euros. After more than a decade of eschewing large deals, CEO Oliver Baete is paying a rich 17 times earnings for scale in a key market. Projected savings make the price tag stack up. It may be a sign of more to come.

Deutsche Bank flips equities business on its head

25 March 2021

The German lender may be hiring a dozen capital markets experts, less than two years after slashing the team amid mass global layoffs. The equities business has a reputation for being a people-heavy volume game, but Deutsche may have found a way to make small pay, too.

New BaFin boss adds teeth to watchdog’s turnaround

22 March 2021

Mark Branson, current head of Swiss regulator FINMA, will lead the German supervisor reeling from scandals like Wirecard. His task is made harder by the government’s weak reforms. Its willingness to appoint an outsider, however, offers the hope of a much-needed cultural change.

Volkswagen valuation merits shift to higher gear

16 March 2021

The German automaker’s shares rose on plans to double electric vehicle deliveries this year. Were they separate entities, the value of VW’s software arm and its battery car unit could exceed its 110 bln euro market cap. While spinoffs look unlikely, VW shares can climb higher.

VW drives for second place in Tesla-led tech race

12 March 2021

Boss Herbert Diess wants to steer the $128 bln German automaker into the thick of the fast-growing market for in-car software. Closing the gap on Elon Musk’s outfit will be tough. But even a podium finish behind the leader would jump-start Volkswagen’s analogue valuation.

Market jitters make energy IPOs suddenly look good

4 March 2021

Wintershall Dea is preparing to list. Fears over higher borrowing costs make cash-generative oil and gas companies look relatively attractive compared to the high growth stocks investors have been dumping this year. Stabilising crude prices could make for an even sweeter spot.

Porsche IPO would be valid twist in VW soap opera

19 February 2021

More than a decade ago the sports-car maker’s parent tried to buy Volkswagen but wound up ceding control of the brand instead. VW is now mulling a partial float to fund an electric push. A mooted 100 bln euro value looks set to revive old wrangling over what Porsche is worth.

Europe’s chip M&A invaders merit partial knockback

9 February 2021

Germany and Britain must decide whether to allow foreign takeovers of $6 bln Dialog Semiconductor, $5 bln Siltronic and $40 bln Arm. The risk lies in yielding control of scarce, technologically critical assets. In that respect, only the latter two deals are worth blocking.

Deutsche’s trim investment bank is model for peers

4 February 2021

CEO Christian Sewing’s 2019 decision to scrap equities trading, while shrinking costs and capital, hasn’t undermined the remaining wholesale business. The lender’s fixed-income units may even be gaining market share. HSBC, Credit Suisse and others needn’t fear a radical overhaul.

Truck spinoff can shift Daimler into higher gear

3 February 2021

The German automaker plans to list a majority stake in its truck and bus unit in Frankfurt. On a similar multiple as rivals Volvo and Volkswagen-owned Traton, it could be worth 20 bln euros. Consolidation in the sector gives Daimler an extra reason to have its own M&A currency.

AstraZeneca finds Covid-19 charity comes at a cost

28 January 2021

The pharma group’s shares have been hit amid a spat with the EU over its virus treatment, on which it isn’t making a profit. German scientists have now undermined the drug. Making vaccines in a crisis was never going to be easy. In future drugmakers may demand a higher price.

Chip deal price bump shifts spotlight to Berlin

25 January 2021

Taiwan’s GlobalWafers raised its offer for Siltronic to $5.3 bln and cut the acceptance threshold to 50%. It’s probably enough to get the bid over the line. The next question is whether Germany will give up control of a semiconductor supplier. Investors may be too sanguine.

Birkenstock buyout calls for heavy buffing

20 January 2021

CVC may buy the maker of strappy sandals worn by Hollywood stars and monks. Private equity has a good history with niche footwear brands, but the German group is already well-run. To justify a mooted 4 bln euro price tag, the new owner would have to target luxury-style margins.

Germany’s female executive quota is hard to export

15 January 2021

The government will soon require the country’s top 70 companies to have at least one woman on their management boards. The long overdue move will force firms to quickly identify a raft of female talent. But Germany’s unusual corporate structure makes it difficult to replicate.

Merkel exit may give German economy a Green jolt

14 January 2021

The chancellor’s party is picking a new leader. None of the candidates want to really ramp up much-needed infrastructure investment. A saving grace is that Merkel’s exit may weaken her Christian Democrats, empowering the bigger-spending Greens in any future coalition government.

German used-car IPO tests investor haggling skills

13 January 2021

SoftBank-backed Auto1 is dragging the backstreet business into cyberspace. The question is whether CEO Christian Bertermann deserves a technology-style valuation for selling second-hand rides online. Thin margins suggest a mooted valuation of up to 8 billion euros is ambitious.