France

Vivendi’s discount haunts Bollorés post-breakup

17 Dec 2024

The media group split in four to shed a conglomerate valuation penalty. The bits are now collectively worth just 8 bln euros, implying no upside from the move. One lesson is that the discount was always down to the controlling Bolloré clan’s influence rather than the structure.

Green energy will be a smart contrarian trade

17 Dec 2024

Donald Trump’s dislike of offshore wind and threats to axe subsidies imply the renewable sector is one to swerve in 2025. Yet the US president-elect is primarily focused on keeping energy costs low. If permitting gets sped up, Big Tech-driven demand could help green power too.

French political stalemate threatens its economy

12 Dec 2024

The country is without a prime minister after Michel Barnier lost a no-confidence vote. That will make it hard to cut the large budget deficit. In this Viewsroom podcast, Breakingviews columnists explain why a long crisis would deter foreign investors and damage France’s growth.

Months of chaos will cripple France for years

6 Dec 2024

PM Michel Barnier’s budget was only the first step in a plan to stabilise public debt at 116% of GDP by 2028. His government’s collapse will make businesses and households even more reluctant to invest and spend, hitting growth. The country is headed for long-term economic pain.

ECB approach to French storm can be a Gallic shrug

4 Dec 2024

The risk premium on France’s debt is at its highest since the 2012 euro zone crisis. Yet even if it worsens, the European Central Bank is unlikely to deploy knee-jerk rate cuts or bond-buying. It also has the tools to address spillover effects on other member states.

Macron’s options all spell trouble for French debt

3 Dec 2024

The country’s government may collapse, putting the ball in President Emmanuel Macron’s court. He can appoint another centrist prime minister, pick a leader sympathetic to the far right, or call a presidential vote. None of those moves shrink a budget deficit hitting 6% of GDP.

New Stellantis CEO’s first job is a US reset

2 Dec 2024

Carlos Tavares’ abrupt exit comes after the $34 bln carmaker hiked prices and lost market share. The ideal new CEO – able to steer a course around Trump, EU emissions rules and new tech – may not exist. Stellantis could settle for a US expert who can get car dealers back on side.

France faces long-term pain more than debt crisis

28 Nov 2024

Fears that PM Michel Barnier will be ousted by parliament after failing to pass his budget sent French spreads to a 12-year high. The country’s size and resources shield it from a sharp fiscal crunch, but six months without a proper government would weigh heavily on its finances.

Oil’s geopolitical risk premium is still there

27 Nov 2024

Israel and Iran-backed Hezbollah have struck a peace deal brokered by the US and France. In theory, a calmer Middle East plus weaker demand forecasts should prompt a tangible slide in the price of crude. But a tougher US policy on Iran merits an ongoing risk premium.

Tycoons’ odd telco bets mask a greater logic

26 Nov 2024

In recent years high-profile, rich investors like Carlos Slim have snapped up stakes in the likes of $19 bln BT. These haven’t always yielded juicy returns, nor prompted strategic shifts. But as a bet on much-needed consolidation, they may yet end up looking smart.

Italian bank M&A circus risks sidelining investors

26 Nov 2024

Andrea Orcel’s UniCredit offered 10 bln euros for Banco BPM, irking Rome and potentially eliciting a rival swoop from the target’s 9.2% owner Crédit Agricole. Meanwhile BPM may launch its own bid for Monte dei Paschi. The risk is that shareholder interests get lost in the noise.

Adani’s US woes put TotalEnergies on the spot

22 Nov 2024

The $137 bln French group has 20% of Adani Green Energy. Gautam Adani’s US bribery charges present a different challenge to those faced by TotalEnergies in Iran in 2018. But they complicate CEO Patrick Pouyanné’s plans to expand in a key growth market.

Europe’s Starlink-lite is a worthwhile also-ran

21 Nov 2024

EU satellite players like Eutelsat are debt-laden minnows compared to Elon Musk’s SpaceX-owned behemoth. But given Starlink now owns more than 60% of all working satellites, Europe has to start somewhere. Investors shouldn’t count on galactic returns, though.

Gulf states wedge AI efforts between superpowers

21 Nov 2024

The United Arab Emirates and Saudi Arabia are building home-grown silicon smarts and forging links with the likes of Microsoft. In this Viewsroom podcast, Breakingviews columnists discuss how the region is muscling its way into a technology arms race between China and the US.

European airlines’ tough summer adds to M&A logic

11 Nov 2024

Carriers such as $8 bln Lufthansa and $2 bln Air France-KLM saw rising costs and competition on Eastern routes from Chinese rivals. The logical response for EU players is to look West instead. Bidding for Portugal’s state-owned TAP would drive much-needed consolidation.

George Soros’ 1980s US debt warning echoes today

8 Nov 2024

The hedgie said in 1986 that booming stocks belied shaky government finances. That’s true now, and not just in the United States. Britain and France are also battling a fiscal trilemma, where states can’t simultaneously have high spending, low taxes and financial stability.

Burberry buyer would need steel-plated trench coat

6 Nov 2024

Shares in the $4 bln UK luxury group rose after a website reported that Moncler was eyeing a bid. But the returns on offer look low, while boosting the brand will be costly. Possible suitors require deep pockets, and the patience to wait a long time for any kind of payback.

Schneider fails first test of CEO succession plan

4 Nov 2024

The French electric equipment maker ousted Chief Executive Peter Herweck after finding him slow in the execution of his strategy. The $150 bln group needs to be fast in hot markets like data centres. But firing its boss after 18 months shows its decision-making is also wanting.

Vivendi activist’s critique falls on deaf ears

1 Nov 2024

Pushy fund CIAM reckons a planned carveup of the 10-bln-euro media empire favours the controlling Bolloré clan. That’s true. Yet the split at least eases a conglomerate discount. And since voting it down would be a leap into the unknown, investors will probably just stay in line.

French banks’ ups and downs obscure value problem

31 Oct 2024

Société Générale shares rose 7% after its results showed faster growth, while BNP Paribas fell 6% after sluggish earnings. The bigger issue is that both lenders now trade at a discount to euro zone peers. A tough Gallic market and volatile trading units make that hard to change.