VIPsight - 3rd Edition 2017
COMPANIES
Merck KGaA: Next strategic move under preparation
Following the completion of the sale of its biosimilar business to Fresenius, Merck KGaA prepares for the next strategic move. The company announced that it is looking into options for its consumer health business, including a potential full or partial sale of the business as well as strategic partnerships. The consumer health business with its portfolio of Over-the-Counter products delivered sales of €860 million in 2016.
The initiative fits into the corporate strategy. Merck undergoes a transformation process into a science and technology company limiting the amount of resources available to finance the growth of other areas. Consequently, the announcement concluded that any possible proceeds for a potential transaction would be used to deliver on the company´s overall financial targets.
Steinhoff International rejects allegations
In a press release, Steinhoff International rejected allegations of dishonesty made by the German magazine Manager Magazin and said that substantial facts and allegations in the magazine are wrong or misleading. The furniture giant also reminded investors that already on December 4th, 2015, the company confirmed that one of its German subsidiaries has been involved in an investigation regarding the adherence to certain provisions of the German GAAP. In the meantime, though, legal and external audit companies appointed by the company to investigate the matter independently came to the conclusion that no evidence exists that any of the transactions concerned can give rise to any contravention of any provision of German commercial law and topics were reflected correctly in the financial disclosures. Also, Steinhoff added to the statement dated August 24th, 2017, that the group`s relationship with a joint venture partner ended in disputes which are subject of several ongoing legal proceedings.
According to the press release, it is evident that the former joint venture partner abuses the press as part of a “process of litigation.” According to the market reaction, though, it is evident that some shareholders are concerned.
Pfeiffer Vacuum: Request for an extraordinary shareholders meeting received
Following two unsolicited takeover bids earlier this year and a turbulent AGM in May, Pfeiffer Vacuum informed about a request to convene an extraordinary shareholders´ meeting by Pangea GmbH, which is an investment vehicle of the Busch-group. According to the company, the agenda of the meeting is supposed to include the recall of two members of the supervisory board, including the chairman of the supervisory board, and the election of two new members. In addition, the meeting shall decide on the appointment of a special auditor to examine the conduct of the management board and the supervisory board in connection with the takeover bids, as well as the takeover of Nor-Cal Products, Inc., by Pfeiffer Vacuum.
While the message concludes with the information, that the company will consider the proposal and convene a meeting if the statutory requirements are met, a second release states on the same day that the chairman of the supervisory board Dr. Michael Oltmanns will resign form this position, effective October 25, 2017.
Südzucker: Set to be released into the wild….
A major discussion topic at this year´s Südzucker AGM has been the end of the European sugar quota and beet price regulations, effective September 30, 2017. At this point in time, it is still unclear what is going to happen when the markets are liberalized and subject to (relatively) free competition. However, what became very apparent at the meeting is that Südzucker is well aligned to benefit from the new environment. Effectively, more than 40 percent of Group turnover have been subject to this regulation so far, restraining the company, but also the competition.
The company cautioned the expectations of the audience with reference to the expected future sugar price volatility. But it should be noted as well that as a consequence of the European regulation Südzucker controls substantial underutilized capacities it can set into full production without having to make substantial investments. The result is likely to be additional sugar going into exports, potentially up to a 20 percent or more production increase, which could generate an additional earnings impact.