Banks on Brexit: deeds count more than words 30 Mar 2016 Bank of America Merrill Lynch’s B-word ban is the latest sign global financial firms are tying themselves in knots over the UK’s European Union referendum. If big banks want to keep the union, silence is helpful. But a better plan is to hire more people outside London.
VW would be smart to send divi to the junkyard 29 Mar 2016 The German carmaker could save 2.3 bln euros a year by scrapping investor payouts, leaving around 50 bln euros of room to absorb fines from dieselgate. It would show shareholders aren’t getting away unscathed and that VW, whose operations look stable, has room to help itself.
German M&A rules leave targets worse off 24 Mar 2016 An attractive tie-up of U.S. cash dispenser Diebold and German rival Wincor Nixdorf was left hanging in the balance because of safeguards meant to protect minorities. The deal stacks up strategically and financially. Rules and taxes that prevent sensible value creation don’t.
German greed can pay a triple dividend 22 Mar 2016 Public servants are calling for a 6 pct wage hike. Berlin historically has baulked at this kind of raise. Yet higher wages could further rebalance the German economy away from exports and combat euro zone deflation. That could be a useful plus as the migrant crisis bites.
Lufthansa works hard to stay mediocre 17 Mar 2016 The German carrier is boxed in by Gulf airlines, no-frills rivals, high costs and stubborn pilots. Cheap oil helps only slightly. Boss Carsten Spohr’s convoluted strategy makes bits of Lufthansa look more like a job centre than an airline. At best, it’s the least bad option.
Market only half buys LSE merger thesis 16 Mar 2016 Investors have priced in the 450 mln euros in annual savings Deutsche Boerse and its rival exchange hope to create by merging – but no more. The two aim to create value from revenue synergies too. If they can’t convince the market, the tie-up looks vulnerable to an interloper.
BMW clean future dependent on gas-guzzling present 16 Mar 2016 The German automaker is stepping up its costly foray into electric and self-driving cars. The move is strategically sound but will take years to pay off. Meeting CEO Harald Krueger’s ambitious short-term profitability targets will hinge on selling a lot of fuel-hungry SUVs.
Schaeffler shows who’s boss in auto industry 15 Mar 2016 Big suppliers have pricing power. Family run German engineering group Schaeffler just reported a 12.7 percent operating margin, twice what volume carmakers manage. Tighter emission rules will accelerate the trend: green technology is costly, but drivers are unwilling to pay more for cars.
Merkel down not out after Super Sunday defeat 14 Mar 2016 Right-wing populists won large gains in three German state elections. Support for Angela Merkel’s coalition is waning. Yet results also show credible and determined mainstream leaders can still woo voters. This may help the chancellor to keep inner-party critics at bay.
LSE merger must please three tough crowds 9 Mar 2016 A tie-up with rival exchange Deutsche Boerse should please customers by cutting their collateral needs. But it could unsettle regulators if it sees too many derivatives being booked in one place. Squaring that circle might leave less for a third key constituency: shareholders.
Dow-DuPont deal would be tough nut for interlopers 7 Mar 2016 German chemical giant BASF may be considering a counterbid for U.S. rival DuPont. The price would have to include a whopping premium – and cover a $1.9 bln break fee. The tax benefits alone could make the agreed-upon $130 bln union and spinoff with Dow Chemical close to ironclad.
Germany’s Facebook cartel probe deserves a Like 2 Mar 2016 The social network doesn’t charge a price, yet still is not free: users pay with their personal data. But are they getting a fair deal or is Facebook abusing its market power? Either way, it’s good that a pioneering investigation by Germany’s competition watchdog is asking the question.
Rolls-Royce’s board activist is double-edged sword 2 Mar 2016 U.S. activist fund ValueAct has a seat on the board of Rolls-Royce. If the engine maker’s No. 1 shareholder musters enough patience, it can underpin the turnaround engineered by CEO Warren East. But should it push for quick fixes like a breakup, Rolls’ predicament could worsen.
Negative yielding bond world favours the agile 1 Mar 2016 German 10-year bond yields are in sight of last year’s record low, 0.05 percent. There’s no reason why they can’t fall lower than this given Japan just auctioned comparable debt at a sub-zero yield. Investors need to be nimble to make money in this world of negatives.
Deutsche Boerse’s LSE bid could slip up on ICE 1 Mar 2016 The U.S. exchange may crash a merger between Germany’s exchange and its UK peer. Cash and a higher premium would be enough to turn LSE investors’ heads. The German group can counter with big synergies or hike its own bid - but that might annoy customers and its own shareholders.
Angela Merkel opts to enter last chance saloon 29 Feb 2016 The German chancellor has reaffirmed her belief in an open-door policy for migrants. On March 7 she needs a convincing refugee deal with Turkey. Six days later she must limit losses in key regional elections. Without either, her days in the chancellery may be numbered.
Deutsche Boerse and LSE try to create Brexit hedge 26 Feb 2016 The new mega-exchange would be London-domiciled with a German CEO, the two groups have confirmed. But they’re establishing a committee to give non-binding advice if the UK exits the European Union. It may be a way to put Deutsche Boerse’s investors at ease without alarming LSE’s.
Hugo Boss growth plans are a size too big 25 Feb 2016 The German label’s chief of eight years is stepping down after a profit warning wiped a fifth off the company’s value. Conditions in the U.S. and China are getting tougher. But the brand’s global expansion and plans to move upmarket also look to have run out of steam.
Deutsche Boerse plays nicely with LSE – for now 25 Feb 2016 The 14 bln euro German exchange is yet to divulge what cost savings may come from a mooted tie-up with its slightly smaller UK peer, but on one estimate it is giving away all their value. It could also base its HQ in London. Such good manners will help overcome future obstacles.
Bayer CEO can bide time on agri-business spinoff 25 Feb 2016 A merger wave among agriculture-chemicals makers may entice incoming boss Werner Baumann to put the German drugmaker’s crop science unit in play. A sale or the like could fetch up to 39 bln euros and unlock value. Yet Bayer’s record revenue and rising profit mean there’s no rush.