Deutsche Boerse data pivot comes at a price 27 Apr 2023 Boss Theodor Weimer is buying fund software firm SimCorp for 4 bln euros. Like peer LSEG, the German exchange is hoping a shift into the faster-growing data business will mean richer valuations. It’s a logical gamble, but such deals are expensive, and take time to pay off.
German $13 bln heat pump sale dents EU green hopes 26 Apr 2023 US firm Carrier Global is buying the energy unit of family-owned Viessmann. It’s a setback for German and European ambitions to create regional leaders in new technology. Yet for continental groups to compete globally, loss of control may be a necessary price.
Bank health barometer could use own health warning 28 Mar 2023 Stock market investors interpreted last week’s jump in Deutsche Bank’s credit default swaps as a sign of distress. Yet thin trading in parts of the $12 trln market for speculating on creditworthiness can exaggerate moves. Add social media and it can feed self-fulfilling spirals.
Deutsche Bahn $16 bln sale has non-obvious endgame 24 Mar 2023 The German railways group may sell logistics arm DB Schenker for over $16 bln to cut debt. The most obvious fit is rival DSV. But selling to private equity or French shipping giant CMA CGM could mean fewer job cuts, which may be more appealing to Deutsche Bahn’s state owner.
Bayer’s sunk boss leaves high water mark 21 Mar 2023 In one of his last acts before bowing to activist pressure, Werner Baumann is pledging the $60 bln drugs-to-seeds company will slash rice’s H2O needs by 25%. Leaving aside his legacy as the architect of the Monsanto deal, his ambition is worth emulating.
Kanye West blunder puts Adidas in play 15 Mar 2023 The $28 bln sportswear maker is battling to restore its image after ditching a lucrative but dubious alliance with the musician. That requires CEO Bjorn Gulden to splurge on marketing, hitting dividends and margins. Adidas’s depressed valuation may soon catch the eye of rivals.
SAP ends pointless M&A roundtrip with Qualtrics 7 Mar 2023 The $150 bln software giant may sell its stake to Silver Lake. A $12 bln valuation implies mediocre returns for SAP, which bought the survey group in 2018. The buyout firm may struggle to put much debt on the target, crimping its profit, but it looks like a more logical owner.
Germany’s electricity headache has an M&A cure 6 Mar 2023 Berlin may spend over 20 bln euros on the local unit of Dutch-owned TenneT. Every country’s power grid needs an overhaul to make it fit for the green transition, but Germany’s need is especially pressing. Still, relatively low debt also makes it easier to take swift action.
Banks’ state shareholders can afford slow selldown 2 Mar 2023 The Belgian and Dutch governments took advantage of a market rally to offload chunks of BNP and ABN. Valuations have risen but are still low relative to lenders’ returns. That means Britain and Germany would be wise to move gradually with their NatWest and Commerzbank holdings.
Ukraine yet to make defence a safe investor haven 20 Feb 2023 Kyiv’s pressing call for weapons to defeat Russia dominated a top security forum in Munich. With defence budgets rising, some investors and banks are tempted to engage more with military hardware firms. For most, however, lethal weapons will remain a no-go investment zone.
KKR can limit the pain of Elliott’s telco blitz 13 Feb 2023 The activist is disrupting the buyout group’s bid for German phone masts firm Vantage Towers. With a 5.6% stake, Paul Singer’s fund is expected to block the delisting until it gets a big payout. But unlike previous Elliott campaigns, KKR has various ways to insulate itself.
Bayer’s new CEO plants seed of future breakup 9 Feb 2023 Bowing to pressure from activist investor Jeff Ubben, the $66 bln drugs-to-seeds maker is replacing embattled boss Werner Baumann. Ditching the architect of the ill-advised Monsanto deal makes sense. Hiring pharma expert Bill Anderson suggests the crop division may be spun off.
Deutsche Bank turnaround victory is really a loss 2 Feb 2023 Technically, CEO Christian Sewing beat an 8% return target that was the centrepiece of his plan to revive the former basket case. Strip out a tax gain, though, and he came up short. It leaves Sewing with a depressingly familiar job: cut costs and hope traders keep raking in cash.
German economic engine is due an overhaul 23 Jan 2023 Slowing global trade hit the country’s exports while higher energy prices boosted imports. The current account surplus shrank last year to 4% of GDP, its lowest level since 2003. As globalisation recedes, Berlin has to reassess the old export-led economic model.
Bayer’s rude health lays better path for breakup 11 Jan 2023 Activists including Jeff Ubben are piling into the $58 bln German seed and drug maker. Its cheap share price, thanks to the dire Monsanto deal, has for years dangled the promise of a lucrative carve-up. Improvements in the pharma unit and a CEO change make it more likely now.
Central bank schism is bad news for bunds 22 Dec 2022 Markets reckon the Federal Reserve will stop hiking rates before the European Central Bank. That has pushed yields on 10-year German bonds closer to those of U.S. Treasuries. The trend will last in 2023, as sticky euro zone prices and a fiscal splurge pressure Berlin’s debt.
Adidas has sneaker each side of ESG turf war 15 Dec 2022 The $24 bln group is probing claims it ignored inappropriate behaviour by Kanye West. Adidas is big in both Europe and the U.S., where investors differ on the “E” of environmental, social and governance issues. It may soon discover how much they diverge on “S” ones, too.
Vodafone picks complex way to shorten to-do list 9 Nov 2022 The 29 bln pound telco is selling up to half an 82% stake in its towers arm to KKR and GIP. Investors will like a delisted Vantage’s scope for more debt, and cuts to Vodafone’s leverage. But the added structural complexity rubs against efforts to remove its valuation discount.
Adidas’s Kanye West bet is still in credit 27 Oct 2022 The 18 bln euro sportswear maker severed ties with the musician over offensive comments. In this Viewsroom podcast, Breakingviews columnists discuss how the financial benefits to Adidas nevertheless outweighed the costs. That may spur other brands to pursue outspoken stars.
Europe’s industrial mess has protectionist endgame 26 Oct 2022 Manufacturers like Germany’s $42 bln BASF face a toxic brew of high energy prices at home and rising risks in China. That implies a freeze on new investment, and a loss of market share to foreign players. To stop that, European states may ultimately intervene with tariffs.