VIPsight - September 2011

COMPANIES

EU to consider stock-market merger

On 4 August the European Commission announced a detailed examination of the proposed merger between Deutsche Börse and NYSE Euronext. An initial market investigation had revealed competition concerns in a number of areas, particularly in derivatives trading and clearing. Examination of the merger was extended until 13 December. The questionnaire sent to Deutsche Börse on more than 70 issues is to be answered by 8 September. The Commission decision to carry out this further test was already expected and cannot be regarded as an anticipation of the final outcome. The Committee on Foreign Investment in the United States, a committee of several ministries in the U.S., sees no safety concerns, however, and has given the project the green light.

 

Blackrock third-largest shareholder in Daimler

U.S. financial investor Blackrock took a stake of 5.72 percent in Stuttgart carmaker Daimler in early August. That puts the world’s largest financial investor behind the Emirate of Kuwait at 6.9 percent and the Abu Dhabi state fund International Petroleum Investment Company (IPIC), as the third largest shareholder. While Renault-Nissan had taken 3.1 percent of the shares as part of a cooperation with the Swabians last year, IPIC came in during the economic crisis in 2009. Daimler recently announced it would invest more than €1.4 billion in the U.S. plant in Tuscaloosa.

 

Daimler and Rolls Royce on target at Tognum

After the European Commission approved the acquisition of the engine specialists Tognum by the two carmakers Daimler and Rolls Royce in late July, at the end of August the other authorities also gave the green light for the transaction. Daimler and Rolls Royce had initially in April offered shareholders €24 per share of the engine manufacturer through their joint venture Engine Holding GmbH, but then, after hesitation by the Tognum management, reworked their offer in May to €26 per share and given extensive siting guarantees. By 22 August, more shares than necessary were tendered, 96.78 percent. The last remaining shareholders now have time to sell their papers to Engine Holding until 10 November. Daimler and Rolls Royce then plan a squeeze-out to flush out the remaining shareholders. Tognum is then to be taken off the market, according to a Daimler spokesperson. At the end of June the group fell out of the technology index MDAX due to a small free float.

 

VW seeks approval for takeover of MAN

Volkswagen has, according to statements on 23 August, formally requested European Commission approval for the takeover of MAN. Europe’s biggest carmaker continues to expect to receive all necessary regulatory approval by the end of the year. Worldwide a number of authorities had already issued their clearance for the takeover in recent weeks, said the Wolfsburgers. The VW group needs the permission from Brussels to be able to integrate the Bavarian manufacturer of commercial vehicles as its eleventh brand.

 

Fresenius Medical Care is growing and growing

The dialysis specialist Fresenius Medical Care (FMC) will put around 1. 7 billion euros on the table for the third-largest U.S. provider, Liberty Dialysis. The Germans also want to pay a further 385 million euros for competitor American Access Care. Both acquisitions still await the permits from the authorities. FMC expects to have to sell dialysis clinics in certain regions to get clearance.

Q-Cells wants "life insurance"

Actually, Bitterfeld solar manufacturer Q-Cells expects to last longer than the warranty period for its modules. However, customers are now very cautious and reluctant to buy, because they fear that in a guarantee case they might get nothing. The customers’ fear is justified: the module specialist recently had to adopt a package of measures that provide for writedowns on its German locations in the amount of 139.7 million euros. A further €73.2 million will be written off on inventories. Although the company recorded revenues of €316 million in the second quarter of 2011, low capacity utilization and the price decline of cells and modules led to an operating loss (EBIT) of €307.7 million. After third-party payments, quarterly net income even fell to minus €354.8 million. Now the Bitterfelders are reacting by largely relocating module production to the cheaper Malaysian plant. 25 to 30 percent of the costs of the German management are also to be saved. Compulsory redundancies should be avoided, however. Nevertheless, the outlook for the entire year remains gloomy: with a turnover of one billion euros, the management expects a loss of hundreds of millions. Not until 2012 does Q-Cells expect its EBIT to be back in the black. The company’s management is reacting to its customers’ fears of bankruptcy and considering, according to Financial Times Deutschland, taking out insurance for warranty claims, a sort of life-insurance policy for the modules to reassure customers.

Fraport interested in Hochtief’s airports

Together with the Deutsche Bank’s infrastructure fund RREF, the airport operator Fraport has bid for construction company Hochtief’s foreign airport holdings, reports Financial Times Deutschland. The Essen firm holds stakes in several airports, including Düsseldorf and Hamburg as well as Athens, Budapest, Tirana and Sidney, in its concessions division, which it wants to get rid of by the year’s end. There was no interest in the German holdings, said Fraport.

 

Commerzbank makes write-offs

The debt crisis recently hailed down on the second-largest German retail bank’s balance sheet. The Frankfurt-based Commerzbank made writedowns on Greek government bonds in its portfolio in the amount of 760 million euros on 30 June. As a result, the outcome for the second quarter fell to 24 million euros, after 352 million euros in the same quarter last year. Analysts had expected a quarterly profit of €34.4 million. The cause of the collapse in earnings was the negative earnings from financial investments, which ended up 954 million in the red. The adjustments on the government securities are posted here. While the core bank reported an overall positive result, the internal bad bank brought the negative result.

 

Thiele stocks up at Vossloh

Heinz Hermann Thiele could, according to a report from the Federal Cartel Office, expand his share of Vossloh to at least 25 percent. The owner of Knorr Bremse announced the share purchase to check, as a precaution. Thiele had in spring exceeded the threshold of five percent in the transportation technology group, increasing his stake most recently to 15.29 percent in July. Officially, the brake manufacturer has not yet commented on the commitment.

 

IPO climate cools

It should have been a hot autumn for IPOs. Besides the big players, the specialty chemical company Evonik, Siemens lighting subsidiary Osram and the slightly smaller specialty chemicals supplier Starck, the automotive division of defence contractor Rheinmetall is standing in the wings for a run at the stock exchange. But the current market turmoil will probably throw a big spanner in the works for the candidates. Especially for the Rheinmetall subsidiary Kolbenschmidt-Pierburg, the window could close quickly, experts suggest. While the industry is currently borne along by a boom in passenger cars, the debt crisis is leaving investors increasingly cautious.

 

DaimlerChrysler donates to politics

The Stuttgart-based car maker Daimler donated 150,000 euros in mid-August to each of the two political parties CDU and SPD, stated the Bundestag agency responsible for managing political contributions. As news agency dpa reported, donations each in equal amount were also made to the two major parties in the years 2007 to 2010. The smaller parties CSU, FDP and Greens received, according to a Daimler spokesperson, 45,000 euros each from Stuttgart. Only the Left Party went empty-handed at the fundraiser, it was said.