Potash Corp may have to go too far to get K+S 3 Jul 2015 The Canadian fertiliser giant is willing to bid $10.5 bln for its German peer. It will need to improve its offer and give credible job guarantees to win over the target. But these concessions could become contradictory. A higher price implies Potash will need bigger cost cuts.
Dirty coal deal dents Merkel’s climate credentials 2 Jul 2015 A costly compromise protecting carbon-heavy lignite has sent RWE shares up 5 pct. But it puts Berlin’s ambitious 2020 emission goals at risk. Angela Merkel’s green credentials are suffering just when she needs them to push for consensus at December’s crucial Paris climate summit.
Deutsche investors imbue new CEO with magic powers 1 Jul 2015 Shares in Germany’s biggest bank rose 5 pct after new boss John Cryan pledged to get tough. The reaction looks overdone: the co-chief executive is sticking to the strategy and delaying details on cost cuts. The right tone helps, but there’s no easy fix for Deutsche’s troubles.
Greece could use German-style last-ditch mediation 1 Jul 2015 A proven technique to resolve deadlocked wage disputes in Germany is worth a try in the Greek standoff. Both sides could name an impartial mediator who proposes a non-binding compromise. By bridging the lack of trust, a breakup prohibitively costly for everyone may be averted.
Bafin spat suggests Deutsche reshuffle was timely 29 Jun 2015 The German regulator’s review of the lender’s Libor affairs has accused outgoing co-CEO Anshu Jain of lying. Jain rejects the allegation as baseless, says Deutsche. But the resulting tension would have made it difficult for him to stay on.
Potash Corp’s German foray reflects cartel woes 26 Jun 2015 The Canadian group that controls a fifth of global potash wants to buy K+S for over 7 bln euros. Success would give Potash Corp its German rival’s new Canadian mine and more pricing power. With a Russian cartel in flux and BHP also a threat, the move looks defensive.
Hudson’s Bay wangles way back to Teutonic roots 15 Jun 2015 The Canadian owner of U.S. store Saks – once an English company headed by a German – has the best of a $3 bln deal to buy Cologne-based retailer Kaufhof. Offloading real estate will help it finance the trade. It also gives Hudson’s Bay a cushion against old world risks.
G7 carbon coup worsens Merkel’s domestic coal woes 9 Jun 2015 Prodded by the German chancellor, the big rich nations’ leaders have pledged to get rid of all fossil fuels by 2100. But at home, her party has joined the unions in fighting a crackdown on heavily polluting lignite. Merkel risks undermining her credibility – and the G7 deal.
Anshu Jain has an embarrassment of job options 8 Jun 2015 Deutsche Bank’s departing co-CEO can follow so many paths. John Thain downsized. Bob Diamond went to Africa. Huw Jenkins and Alan Schwartz took No. 2 roles elsewhere. John Mack got techie. Jes Staley turned hedgie. And then there’s the Stan O’Neal and Ken Lewis option. Bow out.
Anshu Jain’s painful lessons for new Deutsche boss 8 Jun 2015 The co-CEO’s departure has pleased investors irked by the bank’s lack of progress on cutting costs and boosting capital. Jain was slow to re-engineer what proved to be a flawed business model for the post-crisis era. New broom John Cryan can learn from his predecessor’s mistakes.
Deutsche CEO switch eases only two of its problems 7 Jun 2015 Joint bosses Anshu Jain and Juergen Fitschen are being replaced by ex-UBS CFO John Cryan. It’s oddly timed, but logical after poor results, scandals and rising investor ire. Cryan, though, needs to swiftly fill in the gaps of a questionable strategy that isn’t entirely his own.
German job miracle keeps defying gloom-mongers 29 May 2015 Most experts predicted that January’s imposition of a national minimum wage would lead to heavy job losses. But employment in Germany keeps rising and economists are confused. The fears may yet be vindicated, although it could take a recession to show they were right.
Japan’s flood of foreign M&A hits Chinese blockage 26 May 2015 Lixil’s China-focused unit Joyou is set to file for insolvency. Though the financial hit is tolerable, this embarrasses both the $6 bln sanitaryware giant and authorities in Germany, where Joyou traded. It also shows the risks in Japan Inc’s frantic overseas dealmaking.
Deutsche’s cosmetic rejig puts pressure on Jain 21 May 2015 Germany’s biggest bank tweaked its management ahead of today’s AGM. The shift in responsibilities falls short of the leadership overhaul some shareholders seek. But co-CEO Anshu Jain’s new strategy role makes him directly accountable for much-needed cost cuts.
German utilities are living on borrowed time 21 May 2015 Berlin is likely to water down a proposed levy on carbon-rich lignite coal plants. But that’s just a short reprieve for stricken legacy utilities like RWE and Vattenfall. Germany’s ambitious climate policies still mean many coal-fired plants will have to go off the grid early.
Germany on course to waste 50 bln euro opportunity 20 May 2015 The country’s leaders have finally noticed the need for more infrastructure investment. But political inertia is set to delay for years any meaningful rise in outlays. By then, tough anti-debt rules may again restrict spending. Berlin would do better to spend now and worry later.
Vodafone’s reinvention leaves German question 19 May 2015 At long last, the mobile telecoms giant is growing again. Its $30 bln splurge on network infrastructure seems to be paying off. The company is likely to return to organic EBITDA growth this year. The snag is that its biggest market, Germany, is still a work in progress.
UK taxpayers hurt more by EU split than HSBC exit 19 May 2015 Deutsche Bank and its rivals could move operations out of London if Britons vote to leave the EU. That would dent the main source of UK tax from the financial sector - income tax on bankers. It’s a bigger loss than reduced bank levy receipts from HSBC moving its head office.
Hardened ThyssenKrupp can now get real on steel 18 May 2015 The 15 bln euros engineering group has overcome its existential crisis. ThyssenKrupp is now strong enough to consider consolidation in steel-making, which is dogged by low company margins and industry overcapacity. Hammering out a JV with a European rival could be a fix.
Euro zone bond rout breaks whole new set of rules 7 May 2015 Remember when life was simple and easy money pushed up all asset prices? No longer. Government bonds whipsawed on Thursday and stocks are down, while oil prices are up. News isn’t the driver, either. The latest market dramas lack a rationale, but they’re still worrying.