Bayer can still be saved from $66 bln splurge 14 Sep 2016 The agreed takeover of U.S. rival Monsanto is too expensive. The German group's investors have probably lost $7 bln in value already. The question is whether antitrust regulators do what shareholders can't and nix the tie-up. Paying the $2 bln break fee would still be preferable.
Global bond rout gives Draghi a reprieve 14 Sep 2016 The rise in yields as prices fall makes more German debt eligible for ECB purchases, under its own arcane rules. President Mario Draghi is still, though, running out of bonds to buy. Canny market timing is a poor substitute for a real solution: Germany could simply borrow more.
Viewsroom: Trump immigration plan deports $1 trln 12 Sep 2016 The iPhone 7 may seem like an underwhelming upgrade, but it sets the company up well for the rise of augmented reality. Donald Trump's plans to curb visas and send illegal immigrants home defy economic logic. And scandal-prone VW takes its truck ambitions stateside.
One equal merger evaporates as another takes root 12 Sep 2016 Gas producers Linde and Praxair gave up on a $60 bln-plus combination on the same day fertilizer producers Agrium and Potash Corp inked their nearly-$30 bln union. Both deals had strategic logic on their side. But geography, bosses' egos and other factors can win out.
Better to fly Europe’s airlines than buy them 12 Sep 2016 Fuel prices have fallen, but that has incentivised European carriers to keep too many planes airborne. Demand is too weak to meet the supply, which means ticket prices are set to fall, and with them airlines’ profitability.
Corporate decline, thy new name is Uniper 9 Sep 2016 German utility E.ON is listing its coal and gas-fired power plants and other unwanted bits and bobs on the Frankfurt stock market. Uniper is wooing investors with high dividends. But over time, the carbon-heavy group will suffer badly from the fight against climate change.
Bond scarcity is least of Mario Draghi’s problems 7 Sep 2016 A shortage of eligible bonds may force the ECB boss to tweak self-imposed limits on asset purchases. The trick is to do so without upsetting sticklers for rules. It’s a minor test compared with how hard he’s finding it to push up inflation despite spending more than 1 trln euros.
VW jolt not enough to end Icahn trucking nightmare 6 Sep 2016 The investor's 20 pct stake in Navistar got a boost from the troubled U.S. manufacturer's partnership with the German giant. Five years agitating for change has yielded nothing for Icahn or fellow activist owners. The stock needs to rise by half again just for him to break even.
Germany sheds its M&A modesty 6 Sep 2016 Volkswagen, Bayer and Fresenius are among buyers who have more than doubled Germany’s share of global M&A this year. Some companies have ambitious new bosses; others are grasping cheap funding to address low growth at home. The surprise is this merger mania didn’t happen sooner.
Bayer’s tendrils close around Monsanto 6 Sep 2016 A raised $65 billion takeover offer puts more pressure on Monsanto to bend to its German peer. Bayer might stretch a tiny bit further to win over the U.S. seed-maker’s board, but a deal at these levels makes little financial sense. Monsanto is already pushing its luck.
VW’s empire building: the truck stops here 6 Sep 2016 For the German car maker to take 20 pct of U.S. truck maker Navistar sounds like a return to old expansionist habits. Boss Matthias Mueller pledged to simplify the business. The best hope is that it could still presage a split. A more global truck unit may be easier to spin off.
Spain’s sick make for healthy investment 6 Sep 2016 Germany’s Fresenius is paying 5.8 bln euros for Spanish hospital chain Quironsalud. It’s a reasonable price for a sector that has proved lucrative for its private equity owners. An ageing population and a fragmented market means it may still have potential.
German protest vote could entrench Merkel 5 Sep 2016 In a regional election on the chancellor's home turf, the far-right Alternative for Germany won more votes than her own CDU. The populists' rise will increase political noise. Yet it also makes a continuation of Angela Merkel's current coalition after 2017 more likely.
Deutsche capital fix lies in asset management sale 2 Sep 2016 Germany's biggest bank has considered selling its funds business. The upside for Deutsche Bank is a one-off capital boost; the downside a potential ratings downgrade and loss of steady earnings that offset investment bank volatility. But selling part of it could still make sense.
Stars are aligning for German bank merger fest 31 Aug 2016 Commerz and Deutsche Bank held talks earlier this month on a possible tie-up. These may have come to nought, but low rates and a bleak outlook make consolidation an increasingly good idea. The two biggest players may prefer other tie-ups, though.
Warsaw charm offensive shows London’s strengths 30 Aug 2016 Poland hopes to woo investment banks from the UK to its capital city. Credit Suisse, Goldman and BNP Paribas each have 300 or more staff in-country. But most are IT support, not revenue creators. The point is that financial hubs are built on far more than low costs.
Burkinis oust economics in French identity tussle 26 Aug 2016 A ferocious debate over bans on full-body swimwear sounds like pre-election posturing, but is more than that. France is less and less able to hang its identity on a unique economic and social model. As a result, the battleground is shifting to its deep-seated secular tradition.
ITV could take lead role in takeover drama 17 Aug 2016 The largest British free-to-air TV group is chasing Peppa Pig-owner Entertainment One. But ITV could become a target itself. A more than 25 pct drop in its share price and the weak pound make it vulnerable to opportunistic bids from European rivals like RTL.
Raiffeisen yet to wean itself off European sprawl 18 Aug 2016 The Austrian lender upped its capital position in the second quarter after EU stress tests branded it a laggard. But Raiffeisen still aims to be in over a dozen countries, and bad loans are 10.4 pct of its book. Falling interest income and high-risk growth make for an uneasy mix.
Gas mega-merger looks short on solids 16 Aug 2016 A potential $63 bln merger of Praxair with Germany’s Linde could cut the industrial gas market from four big players to three, and create more value than the earlier union of Air Liquide and Airgas. Yet despite strategic appeal, it’s hard to see a deal making financial sense.