Allianz coal ban will change investment climate 24 Nov 2015 The German insurer is to pull $4.3 bln out of investment in coal companies, ditching its scepticism against blanket anti-carbon policies. This rethink suggests big asset managers are taking climate change seriously. Other carbon-heavy industries like oil and cement may be next.
Transatlantic ATM merger unlocks fortress Germany 23 Nov 2015 U.S. cash dispenser maker Diebold is buying Germany’s Wincor Nixdorf for $1.8 bln. It’s the first deal of its kind done for a target without an anchor shareholder. Nixdorf was initially sceptical. Its acceptance suggests German boards no longer see independence as sacrosanct.
German co-op bank M&A shows Landesbanken the way 20 Nov 2015 The merger of cooperative banks DZ and WGZ is a lesson for Germany’s state-owned lenders. The deal generates 100 mln euros of annual cost benefits. Ropey Landesbanken are bogged down by regional vanities but cannot afford to leave that money on the table by dodging mergers.
VW victims eclipsed by firms that bet on lawsuits 17 Nov 2015 A firm backed by hedge fund Elliott is bankrolling a case claiming the carmaker duped shareholders. There are other customer and investor actions, too. The financial muscle makes huge awards more likely. But the real losers may take a back seat if court fights are just business.
E.ON sets dismal scene for dirty power spinoff 11 Nov 2015 The German utility has taken a $9 billion charge on the value of power plants and oil and gas exploration business in the third quarter. The charge does not affect actual cashflow but highlights the grim prospects of the units E.ON will spin off by 2016 under the Uniper brand.
Dud IPO adds fuel to Rocket’s downward trajectory 10 Nov 2015 Cash-burning e-commerce investor Rocket Internet pulled the listing of startup HelloFresh. A $2.8 bln valuation for a loss-making delivery firm of ready-to-cook meals rightly did not sway investors. Rocket shares have more than halved this year, but may have further to fall.
Allianz’s Pimco recovery looks largely priced in 6 Nov 2015 The German insurer’s bond fund Pimco saw inflows in October for the first time in 30 months. That takes the edge off a slightly disappointing set of third-quarter numbers and legal challenges from founder Bill Gross. The catch is Allianz shares already trade at a premium.
Three roadblocks to real change at scandal-hit VW 4 Nov 2015 Family shareholders, unions and the Lower Saxon state all stand in the way of sweeping reforms the carmaker needs, such as an outside chairman. A share-price implosion might sway the family, but for the others to agree, Chancellor Angela Merkel may need to bang heads together.
VW’s new fiasco puts governance back in crosshairs 3 Nov 2015 The carmaker is taking a 2 bln euro charge after saying it may have cheated on fuel-economy stats, too. This escalation yet again flags VW’s rotten processes and culture. Appointing outsiders as directors, chairman and even CEO would be the best way to prove it’s cleaning house.
Carmakers should treat emissions like fatalities 3 Nov 2015 Seatbelts and airbags made cars safer and prevented fatalities. Air pollution kills too, but the auto industry has focused on the law’s letter, not its spirit. VW’s cheating in emissions tests may be a turning point. Rival Peugeot’s pledge to come clean shows the way forward.
BMW hints at globalisation’s big promise 3 Nov 2015 The German carmaker’s results add weight to the theory that regional diversity may make the auto industry less cyclical. A strong Europe and U.S. offset weaker China, pushing pre-tax profit up 13 percent in the third quarter. If BMW can keep it up, the shares deserve a rerating.
VW skids further into the emissions scandal ditch 3 Nov 2015 U.S. regulators accuse the carmaker of putting devices that fool pollution tests on even more autos, including Porsches and a wider array of Audis. If true, the claims would contradict VW’s defense, expose the company’s internal probe as hapless and drag its new CEO into the mire.
Commerzbank boss departs with job only half done 2 Nov 2015 Martin Blessing is leaving the German bank. The CEO has de-risked the lender and paid back most of its crisis-era state aid. Less happily, Commerz’s costs and returns are still not up to scratch. A share price jump shows investors welcome the scope for fresh ideas.
Deutsche Bank looks like tortoise to Barclays hare 29 Oct 2015 The German lender is cutting 35,000 staff and 20 pct of risk assets in John Cryan’s big revamp. Its UK peer did better in Q3 capital markets advisory, a business both seek to grow. With Barclays hit by UK ring-fencing, Deutsche’s investment bank could cope better long term.
Europe’s stricken airlines cursed with good luck 29 Oct 2015 Lufthansa and Air France-KLM reported boosts from lower oil prices and strong summer demand. The uplift is probably temporary. But try telling that to restive pilots who may push back even harder on essential cost cuts. There’s little respite for the carriers’ horrible returns.
Cash-rich VW braced for dieselgate impact 28 Oct 2015 Third-quarter earnings don’t yet reflect the effect of the carmaker’s emissions scandal, besides slightly increasing its recall cost provision to 6.7 bln euros. Strong cashflow and stable demand for its cars suggest VW is in decent shape to absorb the likely financial impact.
Deutsche’s Russia and IT problems could be linked 27 Oct 2015 Regulators are probing up to $6 bln of potentially sanctions-busting Russian trades made by Germany’s biggest lender. Deutsche Bank may be innocent. But another plan to rip up its computer systems implies a host of ways in which potential wrongdoing could slip by unnoticed.
BASF can withstand pain from cheap oil and China 27 Oct 2015 The German chemical giant has been hit by deteriorating emerging markets. Low oil prices also hurt BASF’s exploration business. A slightly poorer 2015 guidance sent shares down more than 3 pct. But a solid balance sheet and strong cashflow justify the group’s $77 bln valuation.
How diesel-mad EU laid seeds of VW scandal 26 Oct 2015 The fierce U.S. response to the carmaker’s emissions manipulation shows Europe has been lax on a core public health issue. Exhaust limits are too high, test procedures too weak, and evidence of non-compliance was missed. Clean diesel is possible, but only with lower auto profit.
Time is missing brick for Vonovia merger ambition 22 Oct 2015 The residential landlord has shot down a tie-up of rivals Deutsche Wohnen and LEG. Instead, eventually, Vonovia and Wohnen are likely to merge. But stretched Vonovia is ill-placed to table a convincing bid right now. It can come back after having digested previous acquisitions.