Switzerland

Rolex’s deal is ticking time bomb for retailers

25 Aug 2023

Shares of Watches of Switzerland slumped 28% after the timepiece-maker bought retail chain Bucherer. The fear is that the luxury group wants to sell directly to consumers. Building a store network won’t be quick but WoS’s business model, and its independence, are under threat.

Unused safety net gives UBS best of both worlds

11 Aug 2023

The Swiss bank scrapped $10 bln of government insurance against losses from rescuing Credit Suisse and repaid emergency central bank loans. Turning down the political heat gives CEO Sergio Ermotti more scope to cut costs. Yet the state remains on the hook for any future problems.

Europe’s listless IPOs are red flag for big floats

31 Jul 2023

The region’s string of mostly mid-sized initial public offerings this year are now just 3% above their listing price on average. Such poor performance will make investors wary of backing new ones. That will give larger float candidates, like CVC and Galderma, pause for thought.

Glencore deal epitomises net zero’s reduced status

27 Jul 2023

The $75 bln miner used to argue it was better to wind down its coal assets than sell them to a less responsible owner. Now CEO Gary Nagle wants to buy a rival and spin off the enlarged coal unit. Investors, distracted by energy security and fat profits, are unlikely to stop him.

How UBS can cling on to its Swiss purchase

6 Jul 2023

CEO Sergio Ermotti is under pressure to offload Credit Suisse’s local unit to ease political anger over the mega bank merger. But selling it could jettison prized wealth assets and $1-2 bln in annual savings. If UBS avoids mass layoffs it will have a stronger case for keeping it.

Sea giant MSC sets sail on erratic M&A journey

4 Jul 2023

After expanding into logistics and eyeing an airline, the maritime firm may buy a train operator for $6 bln. Diversification is key to countering a shipping downturn. MSC’s owner, the Aponte family, is right to deploy its ample cash reserves, but the bet may prove expensive.

Firefighting leaves central banks on shaky ground

22 Jun 2023

Policymakers in the UK, Switzerland, Norway and Turkey all hiked rates on Thursday. Stubborn inflation gives them little choice, even though they may cause recessions. In London and Ankara, ratesetters’ job is made much harder by politicians’ own failures and need for scapegoats.

Swiss $17 bln CoCo case could bite UBS on the tail

21 Jun 2023

Bondholders are suing regulator FINMA for ordering the writedown of funky hybrid bonds to smooth a Credit Suisse deal. If they win, the debt may come back to life, giving UBS a capital hole. Or the government may pick up the tab, creating new political headaches.

Bain’s Swiss software bid merits hard pushback

20 Jun 2023

SoftwareOne rejected a $3 bln offer from the US buyout group. The bidder’s alliance with the founding shareholders puts it in a stronger position than with a recent approach for a similarly named company. But the returns look juicy, meaning it can probably afford to pay more.

Bunge’s $22 bln Viterra deal is a tolerable muddle

13 Jun 2023

The US crops merchant agreed to buy its peer, half-owned by Swiss commodities giant Glencore. Grain inventories cloud the math on the combined company’s debt-load. Even so, the strategic rationale, valuation multiple and savings worth $1.8 bln more than make up for the concern.

UBS’s $10 bln state guarantee is a useful fantasy

7 Jun 2023

The bank is getting Swiss taxpayers to shield it against some losses on its Credit Suisse deal. It allows the government to smooth a controversial takeover, and helps UBS boost a stretched capital ratio. Both sides are making a calculated bet that the backstop is never needed.

Syngenta’s bumper IPO will test Chinese appetite

1 Jun 2023

The seeds-to-pesticides group is planning a $9 bln stock market float in Shanghai this year. In this Viewsroom podcast, Breakingviews columnists explain how investors need to get comfortable with its high debt levels and use of toxic chemicals that could hurt its valuation.

Glencore’s Bunge redux may yield Teck benefits

26 May 2023

The Swiss commodity giant could merge the agri-trader it part-owns with its $14 bln US-listed peer. A Bunge deal would be oddly timed, and Glencore has other ways to raise cash. But the bid may offer a way to spur Glencore’s share price as it mulls a new offer for Canada’s Teck.

Syngenta’s China listing tweak seems a demotion

18 May 2023

The agrichemical giant scrapped a $9 bln IPO on the Nasdaq-like STAR Market to list on Shanghai’s main trading board instead. Beijing probably hopes to make Syngenta a poster child for the venue’s revamp without downsizing the offering. Valuations would suffer regardless.

UBS kitchen sink has protection from further leaks

17 May 2023

The bank reckons it might write down the assets on Credit Suisse’s balance sheet by $10 bln, inflate its liabilities by $3 bln, and take a $4 bln litigation hit. Those numbers could get bigger over time. But a low purchase price gives CEO Sergio Ermotti a chunky margin of error.

Credit Suisse debacle raises oversight question

9 May 2023

Swiss authorities hailed the state-backed rescue of the stricken lender by UBS as a commercial solution that will be light on domestic taxpayers. Banking professor and former SNB official Urs Birchler tells The Exchange podcast why the quick fix is far from ideal.

Glencore’s best Teck tactic is a surgical strike

28 Apr 2023

The Swiss commodities giant has little room to sweeten its $23 bln offer for the Canadian miner without hurting its own shareholders. It can, however, afford a disproportionately higher premium to the controlling Keevil family. Common-stock owners would have to see the upside.

Resolving Credit Suisse: an alternative history

27 Apr 2023

Swiss authorities merged the bank with UBS, rather than risk a financial panic by bailing in bondholders. Yet Credit Suisse was arguably unique and small enough to be wound down. Breakingviews imagines that scenario, which may serve as a template if the enlarged group ever fails.

New UBS investor pitch fits better than old one

25 Apr 2023

Rescuing Credit Suisse is a risky move. But first-quarter results show that the buyer’s existing business is struggling to grow. The merger offers large savings and creates a wealth giant with $3.5 trln of assets. The return of proven cost-cutter Sergio Ermotti as CEO helps.

Credit Suisse mess leaves scattered Swiss debris

24 Apr 2023

A $3 bln state-sponsored UBS takeover prevented the failure of Bern’s other big bank. Yet small, export-oriented Swiss firms now only have one large lender for their needs, and additional bank regulation is likely. Meanwhile, historic US tax issues may come home to roost.