Bank bidders solve tricky German M&A puzzle 5 Apr 2022 Advent and Centerbridge revived their $2 bln Aareal deal by offering a 12% bump and letting rebel shareholders stay invested. It should work, defying the trend of failed German takeovers. The lesson is that debt-free deals with a flexible buyer stand the best chance of success.
Gazprom sale fumble triggers canny German pounce 5 Apr 2022 Berlin took control of the Russian group’s key European unit after it tried to engineer a quick sale. The move stabilises critical assets like gas storage facilities and energy suppliers. It avoids the upfront cost of a nationalisation, and buys time for a longer-term fix.
Time for Europe to break energy sanctions taboo 4 Apr 2022 Alleged Russian atrocities against Ukrainian civilians are set to trigger a harsher EU response. Dependency on Russian oil and gas makes Germany and others reluctant to back a full energy embargo. Taxing hydrocarbon imports is a halfway-house option that still hurts Moscow.
Where odd U.S. yields lead, Europe will follow 30 Mar 2022 Two-year U.S. Treasuries briefly yielded more than 10-year ones. There’s some way to go before such an inversion happens in the euro zone. But high inflation pushed German two-year bond yields into positive territory for the first time since 2014. A replay may be on the cards.
Bayer has 29 bln reasons to say bye-bye to CEO 29 Mar 2022 Four years on, the 61 bln euro group’s Monsanto purchase has left it with cancer litigation and a clunky structure. Its current worth may be 32% less than the value of its bits, arguing for a breakup. That’s hard while boss Werner Baumann, the deal’s architect, is in place.
Germany’s oil embargo block is short-sighted 29 Mar 2022 Berlin is opposing a European ban on Russian energy. A gas embargo would take months to manage. But stopping oil imports now would be doable, while depriving Moscow of resources to fund the war. And Germany could afford the economic price.
Tesla helps surface groundwater for investors 22 Mar 2022 As the U.N. accentuates the resource, the carmaker is opening a new plant in Berlin after delays caused partly by its scarcity. Unseen water creates underappreciated risks both in farming and in cities. Used sustainably, it’s also an opportunity in climate adaptation strategies.
Deutsche CEO’s new plan is a dicey bet on peace 10 Mar 2022 Christian Sewing hopes to boost revenue 4% a year to hit a 10% return on tangible equity target in 2025. A prolonged Ukraine war and soaring energy prices could make that impossible. Sewing would then be back to square one: cutting his way to higher returns rather than growing.
Germany is turning fiscal exceptions into the rule 28 Feb 2022 Chancellor Olaf Scholz will hike defence spending to 2% of GDP and invest 100 bln euros in the military. A historic foreign-policy shift is just the latest instance of Berlin finding ways around its budget rules. Scrapping them would be simpler given a looming energy transition.
Allianz’s U.S. fund misery is only half over 18 Feb 2022 Europe’s largest insurer has set aside $4.2 bln to compensate savers for complex derivative bets that went wrong. The figure, less than the $6 bln claimed, looks positive for shareholders. But with so much extra cash, U.S. regulators may impose a heftier fine to even things out.
Failed deals illuminate red lines for chip buys 8 Feb 2022 The regulatory foiling of UK-based Arm and Germany's Siltronic, foreign takeovers worth $45 bln on announcement, says more about scarce tech than the prospects for industry consolidation. Humdrum mergers remain a useful way for companies to ride out the global chip crisis.
Siemens Gamesa’s new Mr. Fixit can take his time 3 Feb 2022 The wind turbine maker has ousted its second CEO in two years. As another German, Jochen Eickholt may get a frosty reception from Spanish bits of the firm. Parent Siemens Energy won’t mind. The longer Gamesa’s woes drag on, the easier it will be to buy out minority investors.
Siemens Energy wind fix would be worth the money 28 Jan 2022 The German group may buy out minority investors at struggling wind-turbine subsidiary Gamesa. The 5 bln euro bill sounds steep, especially as the problems may be temporary. Yet Siemens Energy can afford it, and it would get to keep the upside for itself when wind power scales up.
Deutsche CEO’s cost-cut ordeal is far from over 27 Jan 2022 Christian Sewing has hacked 2 bln euros of expenses since 2019, and the lender is finally paying a dividend again. Yet even if Sewing manages to hit his profit goals, his ambitions look subpar. The domestic retail and private banking units are prime candidates for further axing.
ESG fervour is weathering its first big storm 27 Jan 2022 Despite a U.S. greenwashing probe, Germany’s 7 bln euro asset manager DWS is seeing further green inflows. Investors’ zeal for funds that tick ethical boxes is outdoing concerns about their fine print and performance relative to dirty funds. Yet the worries aren’t going away.
MSC gives Lufthansa cover for Italian raid 27 Jan 2022 The shipping giant and German carrier want to buy Alitalia successor ITA, a boon for Italian taxpayers. A reported 1.2 bln euro price tag will surprise Berlin, which retains a 14% stake from a 2020 airline bailout. If MSC does the heavy lifting, the swoop is easier to justify.
ThyssenKrupp’s hydrogen hype is oddly conservative 13 Jan 2022 The German group is seeking 600 mln euros from an IPO of Nucera, which uses green power to make the gas from water. It expects the energy transition to inflate sales from almost nothing to 650 mln euros by 2025. Compared to hope-filled listed rivals, the valuation looks sober.
Cerberus hellish German bank bet reaches early end 11 Jan 2022 The U.S. investor sold nearly half of its Deutsche Bank and Commerzbank stakes at a 20% loss. Its investment suffered from bad timing, and the difficulty of forcing change with a small holding. Fund constraints mean the group is now selling in the middle of the banks’ recovery.
European banks’ league-table loss is investor win 10 Jan 2022 Dealmakers at Credit Suisse, Barclays, UBS and others are losing market share in their home region. Fighting back is costly and futile given the advantages of U.S. behemoths like JPMorgan. Better to slim down and focus on key niches, as Deutsche Bank has with bond underwriting.
The Exchange: Riding the high-tech fitness boom 4 Jan 2022 Signa Sports United is a network of web shops and fulfilment systems for cycling, team sports and outdoor kit. Its CEO Stephan Zoll speaks to Dasha Afanasieva about going public through a Ron Burkle-backed SPAC, and how punters are spending big on sophisticated bikes and rackets.