Siemens Energy solves just one of its many issues 15 Nov 2023 CEO Christian Bruch got 12 bln euros of financial guarantees, including from the German state, which fixes the turbine maker’s urgent problem. But he now faces dividend and bonus restrictions. And reviving the struggling wind-power unit will involve racking up yet more losses.
Wind woe opens door for alternative green ideas 9 Nov 2023 Shares of Orsted and Siemens Energy are being battered by their inability to boost profits. In this Viewsroom podcast, Breakingviews columnists explain how trouble in offshore wind may encourage investors to back other clean energy segments like battery storage, cables and solar.
Telefónica $2 bln German swoop is cheap but risky 7 Nov 2023 The Spanish telco is offering to buy out its Teutonic arm’s minority investors. On the surface, it’s a good time to pounce given the unit’s recent slump. But the immediate financial benefits are sketchy, and the debt-laden parent may have to wait years for a German turnaround.
Germany faces tricky call on Siemens Energy aid 26 Oct 2023 The $6 bln firm’s shares slumped 34% on fears banks might not issue guarantees for its projects. Berlin would usually expect investors like parent Siemens, which has a 25% stake, to step in. Yet as Europe ramps up clean energy, there’s a case for state help for existing players.
Europe’s investment-bank push is far from a shove 25 Oct 2023 Deutsche Bank has bought a $500 mln UK boutique, BNP is bulking up in markets and Santander has hired 50 Credit Suisse bankers. Yet no one is trying to go back to 2010, when the region had 48% of the debt-trading business. That’s good for US rivals, and the Europeans’ investors.
West’s latest China corporate risk: medical graft 23 Oct 2023 Beijing is cracking down on corruption in the supply of healthcare products. Western groups like Siemens Healthineers and Philips source over 10% of sales from the People’s Republic. The risk is that domestic rivals use the situation to grab market share.
German auto ram-raid warrants careful driving 20 Oct 2023 Schaeffler is buying car-parts maker Vitesco, both controlled by the same family, for $4 bln. Minority shareholders can choose between a low price now or an uncertain future in a conglomerate. Schaeffler can probably get away with its smash and grab, but it might backfire later.
Obesity revolution gorges on dialysis maker 11 Oct 2023 Shares of Fresenius Medical Care fell 20% after a trial showed a Novo Nordisk drug reduced the risk of kidney failure. It highlights how fast-growing weight-loss treatments will pummel other areas of medicine. The blow may push Fresenius and its parent into corporate surgery.
Europe’s rising bond vigilantes are necessary evil 11 Oct 2023 Debt costs for weaker states like Italy are jumping. Europe’s delay in agreeing new fiscal rules means hostile markets are the only credible check on government spending. Slowing growth and a hamstrung ECB means the backdrop may well get choppier.
Renk blowup points to winter of IPO discontent 5 Oct 2023 The defence contractor pulled its $2 bln listing in Frankfurt. A slump in defence stocks and a selloff in bond markets explain the abrupt decision. But given the company’s growth prospects and cautious pricing, its failure is likely to deter would-be followers.
Germany risks letting a good crisis go to waste 3 Oct 2023 Europe’s largest economy is on track to shrink this year. The immediate causes are lower exports to China and higher energy prices. But decades of under-investment will continue to crimp growth unless Berlin ditches its hostility to fiscal stimulus and comprehensive reforms.
Covid tester buyout hands investors a bitter pill 29 Sep 2023 Cinven is buying back Synlab after floating it just two years ago. Acquiring the German group at a 44% discount to its IPO price is nice for the buyout shop, but hard for investors to swallow. Either way, it reflects ebbing demand for health checks as inflation soars.
Toilet maker artfully unclogs bondholder backup 29 Sep 2023 Embattled Ideal Standard has struck a $640 mln deal to be bought by Germany’s Villeroy & Boch. The key was persuading creditors to accept less than par on 2026 debt. Other struggling companies could make use of similar financial plumbing.
Birkenstock risks stepping into fashion fad trap 13 Sep 2023 Riding a sales boost from the Barbie movie, the German footwear brand has filed for a US listing. Its potential $8 bln valuation rests on shoppers continuing to love its iconic sandals. For IPO-hungry investors, Dr. Martens’ crushed bling ambition is a cautionary tale.
UK leads Europe… in lack of boss pay restraint 25 Aug 2023 British CEOs at top listed groups got a 16% pay hike last year. Yet bosses’ salaries stagnated in France and fell 8% in Germany. Different growth paces partly explain the gap. But UK workers will struggle to take seriously policymakers’ calls for wage restraint to curb inflation.
Germany’s plight is good news for bond investors 24 Aug 2023 Yields on Berlin’s 10-year obligations have spiked this month, mirroring US ones. That looks overdone: Europe’s largest economy is slowing, inflation is falling and the central bank is unlikely to hike rates much more. Such Teutonic frailty should firm up debt valuations.
Birkenstock kicks Europe in the rear with US IPO 2 Aug 2023 The German brand is eyeing an $8 bln New York listing. Owner L Catterton is betting on a US market uptick and publicity from the Barbie movie to double its money. Ditching Europe is not illogical. But as American luxury sales slow, dressing up its no-frills sandals looks hard.
Europe’s listless IPOs are red flag for big floats 31 Jul 2023 The region’s string of mostly mid-sized initial public offerings this year are now just 3% above their listing price on average. Such poor performance will make investors wary of backing new ones. That will give larger float candidates, like CVC and Galderma, pause for thought.
VW and Xpeng get much-needed mutual fuel injection 27 Jul 2023 The $77 bln German carmaker has bought a 5% stake in $18 bln Xpeng. Access to the electric-vehicle maker’s technology could boost VW’s own flagging business in the People’s Republic. But Xpeng equally needs the cash to help withstand a fierce domestic EV price war.
Germany’s China policy caps pain for its companies 14 Jul 2023 Europe’s biggest economy has a new strategy to limit exposure to China and align more with Brussels and Washington. Yet a previous version of the plan was tougher. Big China-focused corporates like BASF and Volkswagen will be relieved they can de-risk at their own pace.