EMEA

Commerz ills make M&A a question of when not if

25 Sep 2024

The German government backed the $20 bln bank’s quest to stay independent amid UniCredit’s approach. But lower rates and a lack of scale mean new CEO Bettina Orlopp will struggle to earn a good return, and so need a merger partner. Patience may reward would-be buyer Andrea Orcel.

Germany’s fiscal obsession leads to bad deals

24 Sep 2024

Finance Minister Christian Lindner is rushing to plug short-term budget holes with a privatisation spree. But he is leaving money on the table. UniCredit only paid a 4.7% premium to buy a stake in Commerzbank. To feed its debt-reduction addiction, Berlin needs better M&A advice.

New consumer CEOs start life in the slow lane

24 Sep 2024

Nike joined Campari, Nestlé and Starbucks in abruptly ditching its boss. There’s plenty of scope for the new CEOs to remedy their predecessors’ missteps. But a common thread at the four groups is slowing sales amid consumer weakness, making the turnaround jobs much tougher.

EU deforestation ban creates a hazy trade future

23 Sep 2024

The European Union wants to ban agricultural imports from deforested land. The rules have laudable aims but will impact $400 bln worth of goods. Developing nations are already exporting elsewhere. To avoid losing vital supplies, Brussels can compensate farmers or lower standards.

Andrea Orcel has scope to soften his Commerz raid

23 Sep 2024

The UniCredit CEO upped his stake in the German bank to 21%, after his approach met a cool reception. The brassy move, and use of derivatives, may anger Berlin further. Luckily, the high returns on offer mean Orcel can make job pledges to soothe M&A-wary unions and politicians.

Murdoch’s UK property bid may yet get even sweeter

23 Sep 2024

Rightmove is mulling an improved $8.1 bln offer from Australia’s REA Group, owned by the media tycoon. A chunky premium and other UK refuseniks’ share price slumps are reasons for the listing portal’s board to say yes. But the buyer’s latest bid implies an ability to pay more.

China-EU trade spat’s next swipe may hit LVMH

23 Sep 2024

Beijing is weighing up retaliating against EU tariffs on electric cars. Targeting the French luxury giant and its rivals would cause minimal strategic pain and hit Paris rather than Berlin. Higher consumption taxes, rather than import duties, could also fit with domestic reforms.

Chip halt flags EU’s also-ran status – and Intel’s

20 Sep 2024

The troubled US chipmaker has paused a 30 bln euros semiconductor factory in Germany. Weak demand is hampering Europe’s hopes to close the semiconductor gap between itself and the US. But another leg of the problem is that Intel itself lags rivals like Nvidia and TSMC.

Mercedes’ China motor hits one of two roadblocks

20 Sep 2024

The $64 bln German carmaker warned of collapsing profitability this year, as a real estate bust in its key Chinese market hurt demand. Lower margins weaken scope for big shareholder payouts. Yet political tensions also raise the risk of unpleasant future tariff surprises.

Bank mega-M&A gets tantalisingly close in Europe

19 Sep 2024

UniCredit, the $68 bln Italian lender, grabbed a 9% stake in Germany’s $16 bln Commerzbank. In this Viewsroom podcast, Breakingviews columnists argue that a full merger makes financial sense, but potentially not for unions or the under-fire government in Berlin.

Axel Springer split gives M&A freedom to news unit

19 Sep 2024

The company’s media assets, like Bild and Politico, will go to a group including CEO Mathias Döpfner in a $15 bln breakup, while KKR gets the classifieds division. The buyout firm has the most valuable bit, but mogul Döpfner gains a debt-free balance sheet with an eye on deals.

Europe’s CO2 fines undermine carmakers’ progress

19 Sep 2024

An auto lobby group called on governments to ease 2025 carbon penalties. Modest relief would help. With EU electric-vehicle sales down 8% year-on-year, Europe’s plan to end combustion engines looks dicey. That’s more down to government inaction than big-spending carmakers.

Defeating tax taboo is scary task for French PM

19 Sep 2024

France’s new Prime Minister Michel Barnier wants to slash the deficit from 6% of GDP and reduce the debt burden. A fiscal squeeze would work but parliament is clamouring for the opposite and President Emmanuel Macron is also against it. The premier’s tenure may be short-lived.

Campari can win back drinkers with marketing binge

18 Sep 2024

The $10 bln Aperol maker’s shares fell after the abrupt departure of CEO Matteo Fantacchiotti. He had a gloomy outlook because consumers aren’t splurging on pricey spirits. The next boss will have to position the company for the next bounce by leaving their card behind the bar.

BoE bond tinkering offers Labour a fiscal lifeline

18 Sep 2024

Governor Andrew Bailey will this week say by how much he wants to reduce the Bank of England’s balance sheet in 2025. If he sticks to 100 bln pounds, higher gilt redemptions and fewer sales will cut the BoE’s losses. That would give the government a much-needed fiscal boost.

Europe headed to muscular industrial policy

17 Sep 2024

The new European Commission marks a power grab by President Ursula von der Leyen, who enjoys more control of key departments. France, meanwhile, gets a tighter grip on industry and markets. The body may be tougher on trade, looser on competition matters and more interventionist.

Commerzbank’s UniCredit defences are built on sand

17 Sep 2024

German politicians fret that a key domestic lender may end up under foreign control, now its Italian rival holds 9%. Berlin’s 12% stake complicates that. But it has no legal mechanism to block a deal the ECB may support, and Deutsche Bank makes for a problematic white knight.

Under-fire workers spell trouble for US and Europe

17 Sep 2024

Unemployment remained low in both blocs even as interest rates rose. Staff hoarding and healthy profits averted layoffs. Now, though, US job vacancies are at the lowest since 2021 and euro zone CEOs want to hire less. If labour markets crack, recessions will be harder to avoid.

ASML faces bigger problems than China

16 Sep 2024

Fears of US tech export curbs have pummelled the $320 bln Dutch firm’s shares. A longer-term worry is that the growth of AI leads to new technologies, and less need for ASML’s machines that make chips smaller and efficient. That, more than trade wars, may hurt its rich valuation.

The European Union risks a sad, bad future

16 Sep 2024

The EU economy is stagnating, while Russia, China and even the United States may bully the bloc. There are potential fixes, as former European Central Bank boss Mario Draghi set out last week. But the EU and its members are currently in no position to implement them.