France

Autos’ car crash ups the likelihood of EU airbags

30 Sep 2024

Stellantis and Volkswagen delivered big profit warnings, amid falling demand for cars. Their woes may encourage policymakers to vote through tariffs on Chinese rivals and go easy on EU carbon fines. But falling output and strained consumers mean carmakers need self-help too.

LVMH wedges door open for future Moncler deal

27 Sep 2024

Bernard Arnault’s $400 bln group will help the CEO of its Italian rival raise his stake in the ski-jacket maker to 18.5%. It tightens Remo Ruffini’s grip on Moncler and puts LVMH in his good books. That leaves the luxury giant in pole position if Ruffini ever opts to sell.

Franco-US food M&A is $10 bln recipe for heartburn

26 Sep 2024

Sodexo, the $13 bln caterer, is eyeing US rival Aramark according to Bloomberg. The returns look low, absent huge cost savings, and a cash deal would leave a debt headache. Recent iffy takeovers in the business-services sector show that scale isn’t always worth the risk.

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.

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.

Telegram and X expose tech platforms’ new reality

12 Sep 2024

The arrest of Pavel Durov, founder of the controversial messaging app, and the ban of X in Brazil shows state officials are not afraid to intervene in Big Tech. In this Viewsroom podcast, Breakingviews columnists debate what it means and how CEOs should manage the threat.

Michel Barnier joins Macron’s last chance saloon

5 Sep 2024

French President Emmanuel Macron picked the former Brexit negotiator to form a government after inconclusive elections. The choice will antagonise the Left and divide the Right. It may buy Paris some time with Brussels on its budget. But the weak executive will have a short life.

Seven & i deal will test Japan’s financial renewal

5 Sep 2024

Couche-Tard’s takeover interest in the 7-Eleven owner is a pivotal moment for the country’s efficiency drive. In this Viewsroom podcast, Breakingviews columnists explain why Tokyo ought to wait to see how the target reacts before opining, and how a deal could easily turn hostile.

Telegram’s route to profitability looks dubious

3 Sep 2024

The troubled app’s CEO Pavel Durov runs a lossmaking enterprise. The easiest path to profitability is to echo Facebook, but content moderation costs would further hit Telegram’s finances. The main alternative is to be a messaging app, but WhatsApp implies that’s hard to monetise.

Telegram CEO arrest is fuzzy warning to Big Tech

28 Aug 2024

Paris prosecutors detained Pavel Durov as part of a probe into illicit activity on the app. The specifics of the case and French law have little read across for rivals like Mark Zuckerberg or Elon Musk. Yet a global scandal will heap pressure on platforms to clean up content.

Luxury’s legal pain is new threat to valuations

20 Aug 2024

Italian prosecutors allege sweatshop-like worker conditions at subcontractors of houses like LVMH’s Dior. That’s a bad look after recent luxury price rises. But if the sector has to hike costs to improve its supply chains, investors may find a new reason to mark valuations down.

Europe’s dealmakers begin tough redemption journey

19 Aug 2024

The market share of BNP, Barclays, UBS, SocGen and Deutsche seems to have troughed at around 8% in M&A and 6% in equity underwriting. The days of ever-increasing US dominance may be over. Getting investors to attach more value to these volatile units, though, is the harder job.

Worldline buyout offers rare shot at easy returns

15 Aug 2024

The $2.5 bln French payment firm is an obvious target thanks to its depressed share price. Private equity buyers can wring out a decent return even with zero profit growth in the next few years. And seeing as France is only a minor market, the state is unlikely to meddle.

Flying PIIGS nations stir rethink in Europe’s core

12 Aug 2024

Former crisis economies like Spain, Greece and Italy have outpaced France and Germany by up to 20% since the pandemic. Lower exposure to manufacturing, a tourism boom and Brussels funds all helped. The role reversal may push Berlin to tolerate looser fiscal and monetary policy.

UK financial watchdog’s H2O thwack has a downside

8 Aug 2024

The fund group will repay 250 mln euros after the FCA said it bought esoteric bonds and didn’t declare conflicts. The deal gets money to investors quicker than if a fine had been levied. But, at just a fraction of what some clients are claiming, the settlement risks looking soft.

L’Oréal’s tardy skin care facelift may backfire

5 Aug 2024

After sitting out its IPO, the cosmetics giant is buying 10% of $19 bln dermatology specialist Galderma, which it sold in 2014. The Swiss firm’s fast-growing injectable business is attractive. Yet the move risks making a potential full takeover overly expensive.

Airlines’ margins head to lower cruising altitude

2 Aug 2024

Carriers from $2 bln Air France-KLM to $7 bln Lufthansa reported healthy demand in the first half of 2024. But earnings are falling as expenses bite. With the switch to sustainable aviation fuel threatening to push costs ever higher, investors are bracing for smaller margins.

BNP’s AXA deal is a logical use of spare cash

2 Aug 2024

The French bank will buy the insurer’s fund unit for 5.1 bln euros, using money from its BancWest sale. It’s a big deal, but the price looks fair. And while BNP Paribas investors may prefer buybacks, a capital-light target makes more sense than a rash swoop on another lender.

Carmakers strain to navigate the next swerves

1 Aug 2024

After responding to the unexpected success of $720 bln Tesla, older manufacturers now face rising China exports amid slower EV growth. In this Viewsroom podcast, Breakingviews columnists discuss how GM, VW and others – including governments – are handling the nascent trade war.

SocGen’s valuation salvation may lie in a breakup

29 Jul 2024

The 19 bln euro French bank trades at a 60% discount to rivals – the widest gap in a decade. None of its core units are particularly attractive, making a revival tough. But selling listed holdings, worth 8 bln euros, could fund a deeper restructuring and make M&A more plausible.