Italy

Orcel uses hammer to unpick UniCredit-Commerz lock

11 Sep 2024

The Italian bank’s CEO is eyeing a full takeover of the $16 bln German lender. Andrea Orcel is taking a blunter route than past M&A talks between the two banks, which used structures like a Frankfurt-listed subsidiary to appease Berlin. His way is more rewarding, but riskier.

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.

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.

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.

Rose-colored Ray-Bans shade brand rehab realities

26 Jul 2024

EssilorLuxottica is paying $1.5 bln for Supreme, whose cachet suffered under Vans owner VF. Streetwear strays from the buyer’s eyewear expertise and the imputed return on capital looks modest. American Apparel also serves as one of many cautionary tales on fashion after it frays.

Carmakers drive efficiency hopes into a ditch

25 Jul 2024

The shares of carmakers Nissan and Stellantis fell around 7% after weak results. The tough US market is hurting sales, erodes the European group’s high margins and hinders its Japanese peer’s turnaround. Unsold cars and cautious consumers mean any recovery will take time.

Euro-banks offer glimpse of possible bad-debt wave

24 Jul 2024

Deutsche upped its forecast loan-loss charge, contributing to a 7% share-price fall. BNP’s default provision spiked, and UniCredit’s has too in Germany. Most of the bad news relates to just a few specific corporate clients. But there will be more if rates stay higher for longer.

Porsche looks stuck in rival Ferrari’s slipstream

24 Jul 2024

The 64 bln euro group’s shares have stalled since a 2022 float, and its valuation trails the Italian group by miles. Competition in China and production snafus may hold it back. The risk is that investors value the 911 maker like a normal carmaker, rather than a luxury group.

KKR-Eni biofuels deal is rich bet on governments

23 Jul 2024

The US investor could pay up to $14 bln for 25% of the Italian group’s bioenergy arm. That’s a big premium to listed peers, at a time when greener fuels made from crops are less favoured. Long-term growth rates mean it makes sense, but only if states keep assisting the market.

Meta stake may blur vision for Ray-Ban maker

18 Jul 2024

The $1.2 trln tech giant may buy 5% of eyewear group EssilorLuxottica. It’s a show of confidence in the companies’ smart glasses partnership. But the investment could complicate the Paris-listed firm’s governance and limit its options for working with rivals like Apple.

European boards have too little skin in the game

17 Jul 2024

Non-executive directors at big US companies get 60% of their pay in equity. That’s rare in Britain, France and Germany, where many board members own a slither of stock. Cash fees warp incentives, discourage engagement, and risk making Europe’s capital markets less competitive.

UniCredit-ECB spat could sharpen watchdog’s teeth

10 Jul 2024

The 60 bln euro bank is contesting in court the regulator’s demand for a faster Russia exit. At issue is whether the European Central Bank can base orders on hypothetical risks. If the supervisor wins, it may be emboldened to take tougher action on issues like climate change.

Le Pen will fail as star of Meloni in Paris

3 Jul 2024

Markets are relatively calm about the prospect of a far-right government after Sunday’s second electoral round. They may believe that Marine Le Pen’s party would mimic the apparent moderation of Italy’s Giorgia Meloni. Her fiscal plans, inexperience and beliefs suggest otherwise.

The risk of a euro crisis is rising

1 Jul 2024

While political instability in France adds to the single currency’s fragility, it probably won’t trigger another meltdown. But euro zone members’ high debts, pressing spending needs and low growth at a time of rising nationalism and geopolitical conflict are storing up trouble.

France raises ghosts of last euro zone crisis

27 Jun 2024

French voters will go to the polls this weekend for the first round of the parliamentary elections. In this Viewsroom podcast, Breakingviews columnists discuss why the country’s rising bond yields and the risks of contagion will be uncomfortably familiar for investors.

Bond traders’ rate-cut party is yet to get going

26 Jun 2024

Central banks from Ottawa to Frankfurt are reducing rates. Bond prices should be rallying, but an index of euro zone debt is up just 0.1% since the ECB eased borrowing costs this month. While French elections are one reason why, tight US monetary policy is the key constraint.

Why the French vote also matters to Italy

25 Jun 2024

The outcome of snap elections in France will reverberate beyond its borders. Debt-laden Italy is particularly exposed if borrowing costs rise. In this Exchange podcast, former top Treasury official Fabrizio Pagani discusses Rome’s fiscal challenges in a changing EU landscape.

Permira has many motives to kill its Golden Goose

19 Jun 2024

The sneaker brand blamed Europe’s political uncertainty for pausing its $1.9 bln listing. Yet a sluggish luxury market and slower growth had already forced it to scale back its price ambitions. For the private equity shop, avoiding a repeat of Dr. Martens’ IPO flop is paramount.

French cracks show up Italy’s messy fiscal house

19 Jun 2024

Investors fear Paris’s financial laxity. Yet, after wasting $235 bln on tax credits for home improvements, Rome’s finances are also shaky. EU funds will help offset the phasing out of incentives. But with weak growth and nervy markets, cutting debt is both harder and more needed.

Euro zone banks’ periphery premium is here to stay

13 Jun 2024

Lenders in Ireland, Italy, Greece and Spain on average trade with a 30% higher price-to-tangible-book value than French, German and Dutch ones. It reflects a reversal of fortunes between the old periphery and core – but also different business models, meaning the gap may persist.