Siemens and Gamesa’s tie-up puts wind in their sales 17 Jun 2016 The German engineer is handing its wind assets and 1 bln euros to the Spanish group in return for a 59 pct stake. In wind power, scale matters. Combining Gamesa’s onshore emerging-markets presence and Siemens’ offshore developed-market focus also sounds a good idea.
VW reform firing on only two and a half cylinders 16 Jun 2016 The stricken carmaker’s new strategy cuts costs and embraces disruptive technology. But properly addressing the flaws that led to Volkswagen’s emissions scandal requires less corporate complexity, and better governance. Boss Matthias Mueller needs to do more on these last two.
Batteries will short-circuit old business models 16 Jun 2016 Cheap, powerful batteries are almost a mass-market reality. The U.S. storage market could grow 45 pct a year, as prices plunge. It’s great for green energy suppliers, and those who like clean air - but less so for old-school utilities, and possibly makers of batteries themselves.
Markets can force rethink of ECB German bond bias 16 Jun 2016 Teutonic yields are sinking. Brexit risks amplify the impact of ECB chief Mario Draghi’s bond buying. Very low borrowing rates are great for governments but heighten the danger of market volatility. Changing rules that force central bank purchases to favour German debt can help.
Brexit is reopening euro zone sovereign wounds 14 Jun 2016 France’s bond yields are rising while Germany’s are falling. It’s a warning markets may doubt the integrity of the euro zone if a UK exit triggers copycat referendums. The ECB has neither the power nor the mandate to fight the kind of extreme outcomes that could ensue.
How Cameron could still pull plug on Brexit vote 13 Jun 2016 Picture the scene: the UK's referendum on EU membership looms, and polls have swung heavily in favour of leaving. Panic grips 10 Downing Street. Yet there may be another way. Breakingviews imagines how a senior advisor to the prime minister might suggest the unthinkable.
DONG and E.ON mark green power’s coming of age 9 Jun 2016 The Danish wind park pioneer’s successful $16 bln IPO and broad shareholder support for the German utility’s retreat from fossil power show investors finally take renewables seriously. They have every reason to do so: climate change goals call for a vast rise in investment.
Tesco demonstrates the art of the subtle U-turn 9 Jun 2016 The UK supermarket may sell the restaurant chain it bought three years ago to lure customers to its larger shops. It was an experiment that didn’t work. With fierce competition and excess store space, retailers need new ideas. Investors may have to put up with a few wrong turns.
Landesbanken head for fresh political stitch-up 8 Jun 2016 Germany's notorious state-owned banks are facing yet another crisis. Bremer Landesbank is reeling from a 400 mln euro hit on shipping loans. It deserves bailing in. But politics may mean it staggers on beyond its sell-by date - a common Landesbanken problem.
Dixon: Fiscal union has no place in EU Brexit plan 7 Jun 2016 European politicians’ knee-jerk reaction if Britain votes to quit the European Union will be to integrate further. This would be foolish, provoking a populist backlash. A better response would be to loosen fiscal policy while embarking on bolder economic and market reforms.
Europe can handle Germanic political risk 6 Jun 2016 Popular President Joachim Gauck won’t run for a new term in 2017. The timing is awkward for Chancellor Angela Merkel. But as voters have no direct say in electing a successor, Austrian-style turmoil is not on the cards. Germany for now will remain Europe’s bedrock of stability.
Bayer-Monsanto could be squeezed in hungry world 3 Jun 2016 Population growth and climate change will boost demand for seeds and agrichemicals. Bayer's strategic rationale for a $62 bln Monsanto bid looks sound. But if food shortages really bite, the merged group's pricing power may come under attack. There are precedents in pharma.
Life lessons from a German corporate failure 3 Jun 2016 With six profit warnings, four CEOs and its share price halving over two years, German industrial services group Bilfinger is a huge corporate disappointment. Now it is finally dismantling itself. Other companies can learn from some of Bilfinger's more glaring mistakes.
Deutsche Bank’s mortgage mess hits new low 1 Jun 2016 The SEC is investigating whether the German lender masked up to $1.5 bln of losses by mispricing mortgage bonds. Now it seems Deutsche’s own risk managers warned of a problem, to little avail. Such post-crisis shenanigans justify Wall Street’s name remaining in the gutter.
LSE-Deutsche Boerse offers jam tomorrow, tomorrow 1 Jun 2016 The two exchanges reckon their merger can create 250 mln euros of new revenue - eventually. But there are plenty of hurdles to delivering the goods, from a potential Brexit to the 20-plus regulatory approvals needed. The inherent slipperiness of boosting sales is a poor lure.
Keeping Kuka German may require going French 1 Jun 2016 Economic minister Sigmar Gabriel is trying to forge a counterbid for the robot maker. Yet Chinese Midea’s $5 bln offer is already frothy. Berlin would have to turn to industrial politics à la française, and maybe even take a direct stake. Better to let markets run their course.
VW travels in two directions, both bad 31 May 2016 The stricken carmaker is making fewer vehicles than a year ago. Yet it hired more people in the first quarter. Investment and distribution costs grew too. Chief Matthias Mueller may be busy with a still-unresolved emissions scandal, but there’s little sign of needed cost-cutting.
Bayer’s Monsanto bid yields poor financial harvest 27 May 2016 The German chemicals group’s rejected $62 bln offer for the seed maker already appeared to violate one of its key principles: stick to projects whose returns beat the cost of capital. Upping the price to win over Monsanto would take heroic sales-growth assumptions to stack up.
German discounters open new front in trolley wars 27 May 2016 Lidl is investing 6.5 billion euros to soup up its stores, half of that outside Germany; peer Aldi is upgrading too. That will advance their attack on the middle market. If they can do it without raising prices, big rivals like UK grocers Tesco and Sainsbury will be in trouble.
European IPO market regains its senses 26 May 2016 Danish renewable energy utility DONG priced its initial public offering at up to $16 bln, suggesting a forward EBITDA multiple in line with stricken carbon-heavy peers. If it sounds dull, that’s the point. European IPOs are still a buyer’s market, but maybe now a rational one.