RTL is a gamble on the future of old-fashioned TV 17 Apr 2013 Bertelsmann is reducing its exposure to TV by selling a chunk of RTL. The German broadcaster seems well-placed to deal with the status quo, but the longer term prospects are less clear. Internet distribution channels present free-to-air terrestrial TV huge headaches.
German caution will make banking union stronger 15 Apr 2013 Germany’s finance minister says that a pan-European bank resolution scheme requires changing the EU treaty. This is less an attempt to delay the banking union than a statement of fact. It does not impact the common bank supervisor, nor direct recapitalisation through the ESM.
Bart Becht’s $10 bln coffee run has dash of Buffett 12 Apr 2013 The former Reckitt chief is leading a buyout of D.E Master Blenders 1753, the Douwe Egberts coffee house. The hot drinks world should get a jolt. Like Warren Buffett’s recent mega-bid for Heinz, this deal mixes consumer goods, cheap debt and billionaire backers.
EU-shaped bonus cap might just fit fund managers 4 Apr 2013 A German MEP wants to impose limits on asset managers’ bonuses. It is hard to see why statutory intervention is required, but reform of pay policies could foster asset allocation behaviour that better serves clients’ long-term interests. Tighter-fitting bonus caps might help.
German eurosceptics strong enough to nudge Merkel 3 Apr 2013 A new anti-euro party is unlikely to make it into parliament in the 2013 elections, but its appeal will make it harder for the chancellor to appear too generous to troubled periphery nations, despite her popularity. The rest of the euro zone should understand her predicament.
German minimum wage talk mostly symbolic for now 2 Apr 2013 The country is one of the few in the EU without a minimum wage. Political parties agree it’s time to end that anomaly. The macroeconomic impact of the reform will be muted. Yet the debate suggests there’s a limit to Berlin’s appetite for deregulated labour markets.
Bertelsmann faces 50 shades of digital challenges 26 Mar 2013 The success of the “50 Shades” erotic trilogy boosted Bertelsmann’s 2012 profit. Yet the media giant’s successful book publisher hides structural weaknesses. Many of the company’s markets are shrinking, and repeated attempts to adjust to the digital age haven’t been convincing.
Germany atones for alleged current account sin 18 Mar 2013 The country’s current account surplus with the euro zone has shrunk from 4 pct to 2 pct of GDP in five years. Germany is contributing to intra-European rebalancing. Quicker progress would be hard to achieve. European policymakers should stop obsessing about German surpluses.
UniCredit benefits from German thawing on Italy 15 Mar 2013 The Italian bank repatriated 1 bln euros more than expected from its German branch. HVB remains over-capitalised due to the Italian jitters of regulator BaFin. In spite of the political mess in Rome, this may be a sign that the banking balkanization of Europe is receding.
Benefits of German 2003 big bang are overstated 14 Mar 2013 Germany started liberalising its labour market 10 years ago. That brought some welcome results, but the Hartz reforms’ impact on Germany’s economic resurgence tend to be overestimated. Wage restraint and a global demand boom for capital goods have been more important.
VW’s mega-profit hides risky governance weak spot 14 Mar 2013 The carmaker’s 25 bln euros of pre-tax earnings are the highest ever for a listed German company. Despite a dismal European car market, current prospects are bright. But in the long term, politically charged and family-dominated governance is a source of vulnerability.
Commerzbank needs to think big on capital raising 13 Mar 2013 The time is right for Germany’s second largest bank to raise equity. Commerzbank should go large. The bank needs to move fast to scotch fears about drip-drip dilution and indecisiveness. The shares may take a short-term hit but markets are looking kind.
German pay hikes good news for Europe if moderate 7 Mar 2013 Wages are rising, within reason. Unions are not in a bellicose mood, and stick to the pragmatic approach that has served the country’s labour market well. This is a welcome development, not only for German workers but also for the rest of Europe.
Market dislike of Axel Springer is over the top 6 Mar 2013 The German media group spooked shareholders with news that the restructuring of its print unit and further digital investments will eat into 2013 profit. The fears look overdone. Springer is coping with the digital transition much better than most of its peers.
RWE will find it tough to renew its powers 5 Mar 2013 Germany’s biggest utility is in better shape than many seemed to think. RWE beat profit targets and pleased with a decision to sell its oil unit. Medium-term challenges are formidable, though. It will find Germany’s push for renewable energy especially hard to cope with.
Bertelsmann’s new BMG tune strikes the right chord 4 Mar 2013 The German media group is buying out KKR, its co-owner of music rights venture BMG. Having sold its music business five years ago, the deal appears to suggest strategic confusion. The truth is more subtle - and appealing. Bertelsmann could yet show greater boldness, though.
Germany’s objections to ESM bank recap have merit 27 Feb 2013 The founding treaty of the euro zone’s bailout fund must be amended before it can directly recapitalise banks. Germany is reluctant, and its electoral climate doesn’t make things easier. But the questions it has raised about the current plan are serious, and should be dealt with.
Lucky coincidences overstate BASF’s success 26 Feb 2013 The world’s largest chemicals company appears to be growing nicely. But it is only cautiously optimistic about the near-term future. Exchange rates and the end of Libyan unrest worked in its favour last year. Such good fortune, in things beyond its control, cannot be relied on.
CME-DB deal is both justifiable and unlikely 26 Feb 2013 The U.S. exchange reportedly made merger overtures to its German rival. Creating a $32 bln powerhouse would mean real savings, and antitrust problems could be solved. But resistance elsewhere could be stiff. And Deutsche Boerse has no pressing reason to give up its independence.
Evonik finally gets its IPO chemistry right 26 Feb 2013 The German specialty chemicals group has aborted IPO plans three times since 2008. As it prepares to try again, investors should think afresh. Evonik is handsomely profitable and well positioned for growth. It looks like an attractive investment.