|Bid||88.44 x 44200|
|Ask||88.65 x 100000|
|Day's Range||88.19 - 89.70|
|52 Week Range||84.42 - 114.12|
|Beta (3Y Monthly)||0.81|
|PE Ratio (TTM)||16.37|
|Forward Dividend & Yield||3.80 (4.27%)|
|1y Target Est||N/A|
(Bloomberg Opinion) -- If you are searching for the EU’s next bad idea, look no further than the “European Future Fund.” The 100 billion euro ($110 billion) pot, first reported in Politico, would be a way to boost strategic sectors which are seen as lagging behind China and the U.S.It’s not a formal policy plan, and the details are still scanty. But Ursula von der Leyen, the incoming president of the European Commission, would be wise to ignore the proposal. Europe needs to pool resources in other areas, starting, for example, with a fund to help euro-zone member states stabilize their economies when they face shocks. It’s best to leave most of industrial policy to national governments, making sure they do so fairly.The “European Future Fund” has been dubbed a sovereign wealth fund – except that it isn’t. The EU is not a sovereign state and will not become one for the foreseeable future. The EU would not be tapping any existing “wealth” or natural resources. A sovereign wealth fund like Norway’s – which uses income generated by its oil and gas reserves – is a way to ensure that such riches are not wasted on current spending, but invested to guarantee future prosperity. The EU would simply be using existing budget resources to create such a fund in the hope of attracting money from the private sector.Any help for Europe’s so-called strategic sectors should be handled with care. There is merit in launching joint R&D initiatives, such as the partnership France and Germany have set up to develop electric car batteries. But it is less clear why the EU should intervene to stop takeovers of individual firms by foreign companies, which seems to be at least one of the reasons to set up this fund. Does the Commission have the ability to manage a stake in a fast-growing tech firm? With what objectives? At what price will the acquisition take place? The risk is that fewer European start-ups will grow if they fear they can’t be sold to a deep-pocketed foreign rival. Take no offense, but Google can be a much more attractive buyer than any “European Future Fund.”The Commission is going at the problem the wrong way. Several member states – France and Germany in particular – have decided that the reason why Europe is not fertile ground for innovation is that companies are not allowed to develop to an adequate size to compete with rivals from China and Silicon Valley. They argue that competition policy needs updating, which is really a polite way to say it needs to be watered down. This argument is misplaced in several ways. Economic studies have found no direct relationship between how large and how innovative a business is. Moreover, the Commission rarely blocks mergers between companies that operate in similar industries. If a state wants to step in and buy a company at its market price and manage it in a competitive manner, there is no reason why it can’t.Margrethe Vestager, the EU’s departing competition commissioner, has offered some meaningful resistance to this Franco-German push, for example blocking the rail merger between Alstom SA and Siemens AG. But it’s unclear that any new commissioner, assuming she moves on to another role, will be as combative. The EU needs a strong enforcer of competition more than any lofty new fund.To contact the author of this story: Ferdinando Giugliano at firstname.lastname@example.orgTo contact the editor responsible for this story: Stephanie Baker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Ferdinando Giugliano writes columns on European economics for Bloomberg Opinion. He is also an economics columnist for La Repubblica and was a member of the editorial board of the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Brussels is considering plans to launch a €100bn sovereign wealth fund to finance European industrial champions to compete with US companies such as Apple and Google and China’s Alibaba. EU civil servants ...
(Bloomberg) -- The slender boat lurches forward, its four passengers clinging to the wooden deck as they surge past the Monaco skyline. For all its sculpted lines and awesome acceleration, the white cruiser wouldn’t be out of place with climate activist Greta Thunberg at the wheel, rather than the moneyed elite flocking to the principality in search of a new toy.“Such aggressive acceleration is only possible with electric drives,” says Peter Minder, as he commands the 250,000-euro ($277,000) boat built by his company Designboats.ch. Only the air stream and a high-pitched buzz from twin electric engines betray a speed of almost 30 miles per hour. “Our clients increasingly want to enjoy their maritime hobbies without emissions and noise. But they still want to have fun.”While electric cars are a realistic alternative to the century-old internal-combustion engine, the world’s waterways are dominated by ships that belch plumes of diesel exhaust and heavy fuel oil. But because of long life cycles and a shortage of charging infrastructure and advanced batteries, converting ships is difficult. That hasn’t stopped governments from Norway to Thailand insisting on a greener future.Monaco, just a speck on the global map, wants to play a part. The city state attracts some of the most luxurious—and thirsty—private yachts, and Minder presented his electric cruiser there together with Torqeedo, a German maker of boat engines that’s emerged as a leader in the industry. It’s done so under the roof of an unlikely owner—heavy-machine engine maker Deutz AG—which bought Torqeedo in 2017 to diversify its more conventional portfolio.RELATED: Hinckley Yachts Unveils World’s First Fully Electric Luxury BoatThis year, Torqeedo aims to sell its 100,000th electric engine, most of which power smaller leisure boats. But Torqeedo has its eyes on a bigger slice of the market.“We expect a lot from ferries and water taxis, and we want to be a player when Amsterdam, Paris, and Venice electrify their fleets,” company founder Christoph Ballin said.Monaco has committed to cutting CO2 emissions in half by 2030 and become carbon neutral by the middle of the century. Amsterdam aims to gradually ban all combustion engines, which applies to boats and ships, in a large part of the city from 2025. Paris plans to reach that stage by 2030. Norway wants two thirds of its car ferries to be battery powered by 2030, with a view to also electrify the fisheries fleet, according to Prime Minister Erna Solberg.“Electric drives are increasingly playing a role for vessels of limited size and for limited distances—on lakes and rivers, and near the coast,” said Peter Mueller-Baum, a managing director at Germany’s VDMA machinery association. “This could become an important segment, because it theoretically encompasses a large number of vessels.”There are already Torqeedo-powered ships on several continents. In southern Spain, a solar-driven ferry for 120 passengers covers a distance of almost 10 kilometers eight times a day on the Mar Menor lagoon. Smog-plagued Bangkok is readying seven ferries that will operate along the Khlong Phadung canal later this year, and there are also ferries with Torqeedo drives in Dubai, and in Ottawa.Even Thunberg, the Swedish green activist, turned to Torqeedo technology for her trans-Atlantic traverse in a sailing vessel this month, when several tender boats with electric propulsion escorted her ship out of Plymouth harbor in the U.K.For parent Deutz, Torqeedo is a laboratory to study alternative drives. The company, which has produced combustion engines for more than 150 years, already kitted out a telescopic handler and a small excavator with an electric drive, as pressure mounts from cities and municipalities to upgrade construction machines and reduce emissions and noise.“Almost all of our customers are more or less intensively looking at electric drives,” said Deutz CEO Frank Hiller.For now, Torqeedo still weighs on its parent company’s accounts. Torqeedo’s operating loss amounted to 8.2 million euros in the first half of this year, according to Deutz’s latest interim report, a deterioration to the previous year’s figure because of a 2.5 million-euro provision tied to product recall from faulty batteries.Torqeedo gets its technology from the road, adapting components from the automotive industry to save development costs and benefit from economies of scale, Ballin said. For example, the power stores for many Torqeedo drives come from BMW.“The hardware is the same, we only change the software,” said Soeren Mohr, who works on electric engines for industrial customers at the Munich-based carmaker.The field in which Torqeedo operates is becoming increasingly crowded. German industrial behemoth Siemens AG has equipped ferries in Norway and Finland. In May, Italian shipyard CCN presented an hybrid-driven super yacht with propulsion systems by Siemens and marine specialist Schottel GmbH.Besides greener credentials, there’s another benefit of switching to battery power, said Felix von Borck, co-founder of German industrial battery producer Akasol AG.“If you own a hundred-meter super yacht or a smaller boat, and you are able to navigate silently and emission-free, you get a better berth.”And in places like Monaco—whether on the crowded landmass or the glitzy harbor below—location is still everything.To contact the author of this story: David Verbeek in Frankfurt at firstname.lastname@example.orgTo contact the editor responsible for this story: Benedikt Kammel at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Germany's powerful union IG Metall, which represents the interests of Osram employees in the tussle over the German lighting group's future, on Monday rejected a planned takeover offer from Austrian sensor specialist AMS. "For IG Metall, the strategy behind AMS's offer is still not convincing," a spokeswoman said. AMS plans to buy Osram in a deal that would value the bigger group at 4.3 billion euros ($4.8 billion), trumping a competing bid by finance investors Bain and Carlyle.
(Bloomberg) -- AMS AG re-entered the battle for Osram Licht AG with a 3.7 billion euros ($4.1 billion) offer, days after a major shareholder rejected a lower bid by rivals for the German light and sensor maker.Osram soared as much as 11% Monday, following the weekend approach from AMS that values the target at 38.50 euros a share. That compares with the 35 euros-a-share from private-equity firms Bain Capital and Carlyle Group, thrown into jeopardy last week when top investor, Allianz Global Investors, rejected it as too low.The new offer is in line with an earlier bid that Austrian sensor maker AMS mooted but then withdrew almost a month ago.Osram “raised valid concerns in the past, and I think with the offer we provided them yesterday, we answered all their concerns,” AMS Chief Executive Officer Alexander Everke said in a call with reporters on Monday. “We have been looking at Osram for a long time.”AMS shares fell 8.7% in Zurich. Osram traded at 35.09 euros as of 9:07 a.m. in Frankfurt.AMS is in regular contact with investors, including Allianz, Everke said on the call. Allianz is a shareholder of both companies, holding about 0.38% in AMS and 9.3% of Osram, according to data compiled by Bloomberg.Osram became a takeover target after a series of profit warnings and a public spat over strategy with Siemens AG, which spun off the division in 2013. Its earnings have suffered because of the company’s exposure to the automotive industry, which accounts for over half of its revenue.Carmakers and suppliers are grappling with shrinking demand in China and Europe and the expensive transition to electric cars. Investors also lost confidence in the ability of CEO Olaf Berlien and management to turn the company around. The stock has lost more than half its value since peaking in early 2018.“This counter bid will test how keen the private-equity consortium is for the Osram asset as AMS has now secured financing to offer 10% more per share,” Morgan Stanley analyst Lucie Carrier said in a note.If AMS were successful in its takeover attempt, it would sell off Osram’s digital division that makes lighting controls for use in horticultural and medical systems, among others. The company would also not touch Osram’s collective bargaining agreements for five years, according to the statement.(Updates with AMS CEO comment in sixth paragraph)\--With assistance from Eyk Henning.To contact the reporter on this story: Oliver Sachgau in Munich at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Palazzo at email@example.com, John BowkerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Ivanka Trump has opened the White House doors and her father’s administration to companies that participate in a worker-training initiative she’s led, even as the president adopts policies that labor unions say would weaken apprenticeships.The president and his daughter, who is a senior adviser in the White House, celebrated the anniversary of her “Pledge to America’s Workers” program late last month. More than 300 companies including Apple Inc., Microsoft Corp., WalMart Inc., Salesforce.com Inc., Lockheed Martin Corp. and Toyota Motor Corp. have agreed to train more than 12 million people, the White House says.Participating in the program may score the companies goodwill and even face-time with a president who sometimes considers policies that would hurt them. For example, Trump has threatened to slap tariffs against cars Toyota imports to the U.S. and on iPhones imported from China, and he’s criticized the price of weapons Lockheed makes for the military, its most important customer.For the companies, participation is low-risk. Much of the training would have been done in the absence of Ivanka Trump’s initiative, some companies say, and the program sets few standards for employers to meet and carries no repercussions if they fall short. After signing pledges, participating companies have received visits from Ivanka Trump, Vice President Mike Pence and members of the president’s cabinet, as well as invitations to the White House.The president has touted the pledge as part of his economic agenda on the campaign trail.“Republicans believe that a nation must care for its own citizens first,” he said at a rally in Cincinnati last week. “Our pledge to America’s workers has secured commitments to train more than 12 million Americans for the jobs of tomorrow. You know who’s working very hard on that? You’ve probably never heard of her -- Ivanka Trump.”‘Decimate’ ApprenticeshipsThe initiative, which has no federal funding, has also helped Trump make clear that he considers employee training the responsibility of the private sector. The Department of Labor recently proposed a regulation that would allow employers to set their own standards for apprenticeship programs, a proposal the administration says would expand such opportunities for workers.The AFL-CIO, though, said the new rules “could decimate training and labor standards in registered apprenticeship programs across the country.” The proposal would “give employers license to implement whatever low-road standards they see fit,” said Carolyn Bobb, a spokeswoman for the group.Jessica Ditto, a White House spokeswoman, said in a statement Friday that “the pledge has been a catalyst to create over 12 million training and education opportunities for future and current workers and should be applauded by all.”An official who asked not to be identified said that the program is designed as a call-to-action, that the private sector is better suited than government to handle training, and that companies’ pledges are vetted before being accepted. The official rejected the AFL-CIO’s view, saying the proposed new apprenticeship rules would expand the program to companies that previously found it unworkable.Executives at companies and industry groups that have signed it say the pledge at the very least helps draw attention to the need to train and re-train workers in an economy with near-record low unemployment. White House events celebrating the initiative have included heartfelt testimonials from workers who were promoted after receiving technical training.Todd Thibodeaux leads an association of IT companies that offers training programs for a sector starved for workers. Known as Computing Technology Industry Association (CompTIA), it pledged 625,000 worker certifications for the White House program. Thibodeaux was invited to the White House in July to sign his group’s pledge.“For us, it was a continuation of things we were going to do anyway, that we were already doing, but an opportunity for us to pledge our commitment,” Thibodeaux said. The tech sector needs to do more to open doors for new workers, even if they don’t have a college degree, he said.“If 500 people find out about CompTIA because we did the pledge, and that helps them get a job, it’s a huge win for us,” he said.Ivanka’s TravelsSeveral companies that have signed pledges acknowledge their commitments include training they’d planned on doing already, to varying degrees. Toyota pledged to train 200,000 workers, saying it would “broaden our training and keep closer track of our numbers,” while declining to specify how much of the training would be new.Ivanka Trump visited the company’s car plant in Kentucky for a March signing event, and welcomed one of the company’s executives to the White House again in July.Apple pledged 10,000 opportunities, and CEO Tim Cook serves on the board. Trump has praised Cook recently, and predicted the company would build a manufacturing plant in Texas. The company said the pledge was for new training: “an additional 10,000 people as part of our ongoing initiatives with community colleges in the United States.”Microsoft also pledged 10,000 opportunities, and a spokesperson declined to say how many were actually new. The two companies are America’s biggest by market capitalization, likely giving them clout with any administration, though their pledges are far outpaced by other smaller firms.Salesforce pledged 500,000 training opportunities, including through its free online learning platform, and then doubled its commitment to 1,000,000 as Ivanka Trump visited the company’s Indianapolis facility. Spokespeople for the company declined to say what share of the training is new.She also visited a Siemens AG facility in North Carolina after the company pledged 75,000 training opportunities and a Lockheed Martin site after it pledged 8,000, which a spokesperson for Lockheed, Krista Alestock, said is a mix of existing and expanded training programs. Lockheed’s CEO, Marillyn Hewson, took part in the July event at the White House.A Siemens spokesperson referred to a news release that said its pledge would “expand the company’s U.S. education and training opportunities, reaching more than 75,000 workers and students over the next five years.”Alestock said Lockheed has so far met 23 percent of its five-year pledge, creating a total of 1,900 apprenticeships, “early career and mid-career opportunities” and high school internships.In addition to Pence, Commerce Secretary Wilbur Ross, Health and Human Services Secretary Alex Azar, Agriculture Secretary Sonny Perdue, Transportation Secretary Elaine Chao, Interior Secretary David Bernhardt, Housing and Urban Development Secretary Ben Carson, acting Environmental Protection Agency Administrator Andrew Wheeler, acting Small Business Administrator Chris Pilkerton and former Labor Secretary Alex Acosta have all held events with companies that have signed Ivanka Trump’s job pledge.24 MillionWalmart pledged 1,000,000 opportunities, which includes a mix of two-week courses for store associates and other programs. It’s not all new training spurred only by the pledge.“It was the first time that we had publicly committed to a specific number on our training programs,” spokesman Kory Lundberg said. “Anytime there’s a chance to bring attention to this issue of workforce skilling, we want to be involved in that.”The pledges -- largely unconstrained by rules or close oversight -- look poised to rise. Ivanka Trump welcomes them from virtually any sector and at a wide range of numbers, while offering the carrot of a supportive message -- some companies have put her name on press releases -- or a visit to the White House for firms and industry groups that make commitments.“So, congratulations, Ivanka, congratulations, and keep it up. So, when will you hit 24 million?” the president asked at the White House in July. She replied: “At this pace, very soon.”(Updates with White House comment in ninth paragraph.)To contact the reporter on this story: Josh Wingrove in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Alex Wayne at email@example.com, Joshua GalluFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Corindus Vascular Robotics (NYSE: CVRS ) shares are trading higher after the company announced it will be acquired by Siemens Healthineers AG for $4.28 per share in cash representing an aggregate purchase ...
(Bloomberg) -- Siemens Healthineers AG plans to buy U.S. surgical firm Corindus Vascular Robotics Inc. for $1.1. billion, an acquisition aimed at broadening its portfolio of medical equipment beyond scanners.Healthineers will pay $4.28 for each share in Waltham, Massachusetts-based Corindus, according to a statement Thursday. That’s 77% above Corindus’s last closing price. The deal is expected to close in the final quarter of 2019, and has the support of the Corindus board, the German company said.The acquisition is aimed at convincing investors in Healthineers that the former unit of Siemens AG can grow beyond MRI and CT scanners, which form the bulk of earnings. Its Atellica platform, which combines various devices used to analyze blood tests, was already an attempt to do this and became the focus of the company’s growth pitch when it listed shares last year in an initial public offering.Atellica ran into some problems after installations proved to be more difficult and costly than first thought. The company last week lowered its full-year target for the platform, and has reorganized the business in an effort to speed up shipments.Corindus may now bolster Healthineers’ advanced therapies business, which focuses on imaging systems that aid surgeons in cardiovascular surgery. For the moment, advanced therapies is the smallest Healthineers division, making 65 million euros in profit in the last quarter. Corindus specializes in robotic systems that help guide catheters, wires and balloon or stent implants into veins with the help of imaging equipment Healthineers already makes.Royal Philips NV has a 12.8% stake in Corindus and competes with Healthineers in the medical-scanner market. The Dutch company said Thursday it’s reviewing the deal and declined further comment.“We are very mindful of the shareholder structure,” said Jochen Schmitz, chief financial officer of Healthineers. “This is to be a regular process between signing and closing, so we don’t see any particular problems, no interfering from Philips, but you never know.”Healthineers shares fell 1% to 36.06 euros at 11:26 a.m. in Frankfurt. Corindus, set to report second-quarter earnings later Thursday, surged 75% in pre-market trading in New York to $4.23 per share.“The acquisition appears to be a good fit,” RBC Europe analyst Wasi Rizvi wrote in a note. “The vascular interventions market is growing at about 20% a year.”Healthineers Chief Executive Officer Bernd Montag said the acquisition would open up a new field for the company’s image-guided therapies business.“We are creating significant synergies to advance therapy outcomes,” he said.(Updates with details on Philips stake from sixth paragraph.)To contact the reporters on this story: Oliver Sachgau in Munich at firstname.lastname@example.org;Ellen Proper in Amsterdam at email@example.comTo contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, John Bowker, Marthe FourcadeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Siemens Healthineers has agreed to buy Corindus Vascular Robotics for $1.1 billion in the biggest acquisition since the Siemens subsidiary listed on the stock market last year. Healthineers is paying $4.28 per share for Massachusetts-based Corindus, which develops robotic systems for minimally invasive vascular therapy procedures, a 77% premium to the U.S. company's closing price on Wednesday. Systems produced by Corindus, which has approximately 100 employees, allow doctors to guide catheters and stent implants with controlling modules.
Siemens Healthineers has agreed to buy Corindus Vascular Robotics for $1.1 billion in the biggest acquisition since the Siemens subsidiary listed on the stock market last year. Healthineers is paying $4.28 per share for Massachusetts-based Corindus, which develops robotic systems for minimally invasive vascular therapy procedures, a 77% premium to the U.S. company's closing price on Wednesday.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Factories across Asia and Europe are increasingly feeling the brunt of the festering U.S.-China trade war that shows no imminent sign of ending.Purchasing managers’ indexes from some of the largest economies on both continents remained below 50 in July, signaling contractions in industrial output. Germany, the motor of Europe’s growth, is mired in its worst manufacturing slump in seven years. A global measure showed a third consecutive decline in activity.The deteriorating outlook forced Siemens AG, Europe’s largest engineering company and a global exporter, to warn on Thursday that its sales target will be harder to reach. The gloom has prompted central banks from Asia to the U.S. to cut interest rates, with stimulus promised in Europe too.“Central banks are easing monetary policy now -- that should help, but there’s always a delay before that shows results,” said Aline Schuiling, senior economist at ABN Amro Bank NV in Amsterdam. “Manufacturing may bottom out around the start of next year but there are a lot of risks.”In the U.S., IHS Markit’s factory PMI was the lowest in almost a decade in July, while a separate gauge by the Institute for Supply Management also eased. Both signaled growth, albeit at a weakening pace.Euro-area manufacturing shrank for a sixth month at the start of the third quarter, dragged down by Germany, the region’s biggest economy. The downbeat figures follow reports showing slower growth in France, Spain and the euro area, with Italy stagnating.While part of the weakness is linked to troubles in the automotive industry, a continued downturn could spell deeper trouble, and spread to other parts of the economy. As companies respond to falling demand, manufacturing jobs are being cut at the fastest pace in six years, prices are being lowered and optimism is deteriorating.Germany’s Schaeffler AG, a supplier to carmakers, this week cut its forecast and now sees revenue falling this year. Siemens said profit fell 12% last quarter, a sign that the car industry’s woes and a more general economic malaise is reaching deeper into corporate Europe.“Geopolitics and geoeconomics are harming an otherwise positive investment environment,” said Siemens Chief Executive Officer Joe Kaeser.Chinese companies, too, are lowering their expectations. Some 40% of the more than 1,600 firms to give first-half guidance predicted a drop in earnings from a year earlier.What Bloomberg’s Economists Say“Indexes across many Asian economies -- on balance -- painted a weaker picture for the region than China, where yesterday’s official PMI showed some signs of improvement. Manufacturing PMIs from several countries broadly stayed at weak levels, and one more country -- Indonesia -- fell into contractionary territory.”-- Chang Shu and Qian WanClick here for the full reportMonetary authorities across the world have been working to counter the slowdown. Australia, South Korea and Indonesia are among central banks that cut interest rates last month, while the Federal Reserve lowered its benchmark for the first time since 2008 on Wednesday. The European Central Bank is preparing action for September.The International Monetary Fund last month cut its global outlook, already the lowest since the financial crisis, and warned about policy “missteps” on trade. A fresh round of negotiations between the U.S. and China ended in Shanghai Wednesday with little sign of progress. Both sides plan to meet again in Washington in September.(Updates with global number in second paragraph.)\--With assistance from Enda Curran and Michelle Jamrisko.To contact the reporters on this story: Fergal O'Brien in Zurich at email@example.com;Jana Randow in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Stirling at email@example.com, Paul GordonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- German industrial giant Siemens AG became the latest casualty of Europe’s economic slowdown, warning a sharp deterioration in some markets hurt quarterly profit and has put financial goals at risk.The shares dropped as much as 5.9% on Thursday, the most in more than three years, after the region’s largest engineering company reported a disappointing set of results, joining ArcelorMittal, Rheinmetall AG and BMW AG in providing evidence of the gathering storm.The earnings are a sign that a deepening slump in the global car industry and a more general economic malaise are reaching further into corporate Europe. Until now, Siemens was able to rely on its digital industries division supplying factories with equipment to automate to make up for a protracted slump in the power and gas sector. In the latest quarter, even orders and sales at that unit dropped.“It is difficult to reconcile owning Siemens for its world-class automation, software franchise when this is driving negative earnings,” Morgan Stanley analyst Ben Uglow wrote in a note.Downbeat FiguresManufacturing in the euro area shrank for a sixth month at the start of the third quarter, dragged down by Germany’s worst slump in seven years. The downbeat figures come in the wake of reports showing slower economic growth in France, Spain and the euro area, with Italy stagnating. While part of the weakness is linked to troubles in the automotive industry, a continued downturn could spell more trouble.Behind the economic statistics, an increasing number of companies like Siemens are also sounding the alarm. The German company is in the midst of an overhaul and is already shedding thousands of jobs. During the latest reporting period, profit declined a worse-than-expected 12% and the company said a target for sales growth will be harder to reach and another for profit margin will be at the lower end of a range.“The assumptions we made in the first two quarters about the economic and political environment are no longer true,” Siemens Chief Financial Officer Ralf Thomas said, adding that the auto sector won’t improve for at least three quarters. “We’re taking countermeasures to secure our business’s profitability to the greatest extent possible.”Chief Executive Officer Joe Kaeser has supervised a large-scale breakup of Siemens’s conglomerate structure, starting with a merger of the wind turbine division and a listing of the health-care division. The planned spinoff of the gas and power unit will be completed in 2020. The German executive also tried and failed to merge the train-making operation with that of rival Alstom SA. The move was partly motivated by the fate of rival conglomerate General Electric Co., which is showing signs of emerging from a troubled period.Siemens’s new structure has greatly reduced the company’s need for people in central operations, where 2,500 job cuts are planned. In total, the company plans to cut more than 10,000 jobs, although Kaeser has said company also plans to hire about 20,000 in the same time.Earnings HighlightsAdjusted Ebita from industrial businesses dropped 12% to 1.94 billion euros ($2.1 billion)Total orders rose 8% to 24.5 billion euros, but dropped 5% at digital and 15% at gas and power businesses, with revenue also dropping at both divisions. The main industrial business margin is expected to be in the lower half of an 11% to 12% target after contracting to 9.6% in the three months through June.To contact the reporter on this story: Oliver Sachgau in Munich at firstname.lastname@example.orgTo contact the editors responsible for this story: Kenneth Wong at email@example.com, Tara Patel, Frank ConnellyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Siemens said a significantly weaker market environment was hurting its key industrial businesses as the company reported a decline in profit for its third quarter.
Siemens said on Thursday deteriorating demand from automotive and machine building firms hit its third-quarter profit, becoming the latest industrial company to warn about a weaker environment hitting its business. Profit margins also shrank as Siemens sold less of its more profitable short-cycle products such as industrial controllers and drives, dragging down the company's net profit by 6%. Shares in Siemens were down 5.04% at 0816 GMT after falling to their lowest level since February earlier.
German blue-chip companies BASF, Siemens, Henkel along with a host of others said on Wednesday they had been victims of cyber attacks, confirming a German media report which said the likely culprit was a state-backed Chinese group. Alongside the German firms named, companies including drug maker Roche, hotels group Marriott, airline Lion Air, conglomerate Sumitomo, and chemicals group Shin-Etsu were also targeted by the hackers, ARD reported. Industrial conglomerate Siemens, shampoo maker Henkel and Swiss pharma group Roche confirmed that they were affected by "Winnti", while BASF and Covestro also confirmed that they have been attacked.
15Five, which builds software and services to help organisations and their employees evaluate their performance, as well as set and meet goals, has closed a Series B round of $30.7 million, money that it plans to use to continue building out the functionality of its core product -- self-evaluations that take "15 minutes to write, 5 minutes to read" -- as well as expand into new services that will sit alongside that. David Hassell, 15Five's CEO and co-founder, would not elaborate on what those new services might be, but he recently started a podcast with the startup's "chief culture officer" Shane Metcalf around the subject of "best-self" management that taps into research on organizational development and positive psychology. At the same time that 15Five works on productizing these principles into software form, it seems that the secondary idea will be to bring in more services and coaching into the mix alongside 15Five's existing SaaS model.
(Bloomberg) -- Osram Licht AG’s supervisory and managing boards accepted a 3.4 billion euro ($3.8 billion) takeover bid from Bain Capital and Carlyle Group LP, ending the German lighting company’s relatively brief and at times contentious period as a standalone company.Bain and Carlyle are offering 35 euros a share, 21% more than the stock’s close on Tuesday, amid reports about the latest offer. The price is still 15% lower than its peak this year in February. They’ve put a minimum acceptance level of 70% on the deal, excluding shares owned by Osram, and the acceptance period will run until early September. The stock rose 1.4% to 32.94 euros at the open of trading in Frankfurt.“Bain and Carlyle bring a lot of experience and have a deep knowledge of the industry,” Ingo Bank, Osram’s chief financial officer, said in a Bloomberg TV interview on Friday. “They will help us build the portfolio.”Bloomberg reported earlier Thursday that Osram’s supervisory board was poised to accept the offer.After Siemens AG spun off the light bulb-making division in 2013, Osram Chief Executive Officer Olaf Berlien began to refocus on higher technology, sparking a bitter and public dispute over strategy. Bain and Carlyle’s purchase of Osram would add to the $51.6 billion in private equity buyouts of European companies announced this year, according to data compiled by Bloomberg.Negotiations to buy Osram have moved slowly since they were first revealed in February. Funding has been a challenge as potential lenders raised concerns about future earnings forecasts for the company after Osram issued a string of profit warnings.Osram’s earnings deterioration during negotiations had a big impact on the deal, and the bidders also had concerns about the impact of the U.S.-China trade war on business. Bain and Carlyle were able to push down the offer price, but also struggled to raise a significant amount of debt, people familiar with the matter said. In the end about 70% of the acquisition cost -- an unusually high proportion -- comes from equity, or cash contributed by the buyers, while the remainder will be borrowed money, the people said.The offer is unlikely to include a so-called material adverse change clause, one of the people said, a provision that would allow the buyer to withdraw from the transaction if certain negative events like a fresh profit warning arise. The buyout firms declined to comment.Osram suffered from a downturn in the automotive industry, yet there remain growth opportunities in that sector, including with autonomous vehicles and continued digital lighting, Bank said in the interview. Bain and Carlyle will be focused on margin improvement as well as growing the business, he added.What Bloomberg Opinion Says“It would require real guts to turn down what Bain and Carlyle are dangling. Osram was already in a weak state when news about the potential bid first emerged in November.”--Bloomberg Opinion columnist Chris HughesThe German company has struggled since it was spun off from Siemens. Berlien shifted Osram’s focus to high-tech specialized lighting and LED chips, although he’s failed to get a handle on weakening market demand as European car sales drop. He has also tried to branch out into new areas to attract revenue such as through the purchase of horticultural lighting maker Fluence.Bain and Carlyle support the company’s strategy, and the bid is “attractive to employees as a lot of the labor provisions will stay intact so, yes, we support the offer,” Bank said.Osram now has the task of getting shareholders on board. Given the board’s acceptance of the offer came just last night, Bank said the company “doesn’t have much feedback” from shareholders yet, but expects the bid to receive “very good support” from investors.The company is hoping to avoid the fate of other take-privates in Germany such as online classifieds operator Scout24 AG, where Blackstone Group LP and Hellman & Friedman in May failed to convince sufficient shareholders to sell amid pressure from hedge funds to boost the offer price.AMS InterestDuring negotiations with Bain and Carlyle, Austrian sensor manufacturer AMS AG made an informal approach about a potential takeover of Osram, according to people familiar with the matter. While there was some strategic fit to a deal, Osram decided against pursuing talks because of concerns about the feasibility of AMS to fund the transaction due to its size and debt levels, said the people.A representative for AMS, which has a market value of $3.4 billion and counts Apple Inc. among its key clients, declined to comment.Credit Suisse Group AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Macquarie Group Ltd. as well as Nomura Holdings Inc. were financial advisers to Bain and Carlyle. Perella Weinberg Partners LP worked with Osram.(Adds info on offer, AMS interest and advisers from seventh paragraph.)\--With assistance from Andrew Noël.To contact the reporters on this story: Eyk Henning in Frankfurt at firstname.lastname@example.org;Aaron Kirchfeld in London at email@example.com;Sarah Syed in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Matthew G. Miller at email@example.com, Amy Thomson, Ben ScentFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The European Union is starting to act like China when it comes to building the batteries that will drive the next generation of cars and trucks.In the past few months, government officials led by European Commission Vice President Maros Sefcovic have joined with manufacturers, development banks and commercial lenders on measures that will channel more than 100 billion euros ($113 billion) into a supply chain for the lithium-ion packs that will power electric cars.Germany and France are prodding for action out of concern that China is racing ahead in new technologies sweeping the auto industry. With 13.8 million jobs representing 6.1% of employment linked to traditional auto manufacturing in the EU, authorities want to ensure that manufacturers can pivot toward supplying electric cars and batteries.“We are walking the talk,” Sefcovic said in remarks to Bloomberg. “We have overcome an initial resignation that this battle would be a lost one for Europe.”A number of trends are catalyzing the program, starting with the determination by EU nations to rein in greenhouse gases and fight climate change. They’re increasingly focused on reducing pollution from diesel engines and alarmed at the head start Chinese companies have in greener technologies. French President Emmanuel Macron in February said he “cannot be happy with a situation where 100% of the batteries of my electric vehicles are produced in Asia.”Drive Trains Go ElectricSo far, the EU’s program is starting to work and putting Europe on track to wrest market share away from China. By 2025, European companies that currently lack a single large battery maker will rival the U.S. in terms of capacity, according to forecasts from BloombergNEF. Measures that will spur investment include:France and Germany are working on measures to channel billions of euros into the battery industry. Sefcovic has said the EC may be able to embrace the state-aid proposal as a special project by the end of October. The two nations are seeking to draw in additional support from Spain, Sweden and Poland.The European Investment Bank gave preliminary approval in May to a 350 million-euro loan supporting NorthVolt AB’s bid to build a battery gigafactory in Sweden after the company completed a fund raising. The EIB along with the European Bank for Reconstruction & Development are working on a “raw materials investment facility” that will help to build a supply chain for rare Earth metals needed for batteries, according to Sefcovic who says he hopes the program will be launched by the end of the year. The EU in May started a 100 million-euro Breakthrough Energy Ventures fund with Microsoft Corp. founder Bill Gates and other investors to advance the energy transition, which is likely to include batteries. The EC has gathered at least 260 industrial companies including Peugeot SA, Total SA and Siemens AG in an alliance aimed at building capacity to make the energy storage devices in Europe.“A year or two ago, everyone was under the impression that it was already too late for Europe,” said James Frith, an energy storage analyst at BloombergNEF in London. “But they’ve made a commitment, and Europe is in a strong position now.”By 2025, Europe may control 11% of global battery cell manufacturing capacity, up from 4% now, according to Frith. That will pare back China’s market share and rival the U.S. command of the industry. The EC estimates the battery market may be worth 250 billion euros a year by then. It estimates at least 100 billion euros already has been committed to battery factories or their suppliers in Europe.The goal is to build enterprises in Europe that could supply the region’s automakers without requiring imports from the major battery manufacturing centers in Asia. Currently, Contemporary Amperex Technology Co., or CATL, and BYD Co. dominate production in China. Elon Musk’s Tesla Inc. is also building battery gigafactories in the U.S.So far, Europe has no established battery supply chain, though it has drawn investment in local factories from Korean firms including LG Chem Ltd. and Samsung SDI Co. as well as CATL.The new ambition of the commission is to stimulate companies big enough to supply the likes of BMW AG and Volkswagen AG, which plan a massive increase in electric car production. Across the industry, the outlook is for a rising portion of cars to run on batteries in the coming years.No single company will get the lion’s share of the investment or aid. Instead, dozens will benefit in addition to Peugeot and Total, which are building a cell plant in Kaiserslautern, Germany. Funds will also trickle into suppliers of parts or raw materials including Siemens, Umicore SA, Solvay SA and Manz AG.Scarred by losing control of the solar industry in the last decade, Germany is leading the push. The nation was the biggest producer of solar cells in the early 2000s before Chinese companies backed by government loans took the lead.When it comes to batteries, Economy and Energy Minister Peter Altmaier is focused on the 800,000 jobs in Germany tied directly to car manufacturing. Batteries account for about a third of the value of an electric car, and without facilities to make those in Europe, more jobs will go to Asia, Altmaier has said.“There’s going to be huge demand in Europe for battery cells,” Altmaier said on ARD Television in June. “We must have the ambition to build the best battery cells in the world in Europe and Germany.”Sefcovic envisions 10 or 20 “gigafactories” making battery cells across Europe and with his support the European Battery Alliance is seeking to coordinate research that will be the foundation of the plan. NorthVolt intends to be one of the major battery makers, feeding BMW and other major automakers.“If we want to be one of the major manufacturers in Europe by 2030 we need to build about 150 gigawatt-hours of capacity,’’ said NorthVolt Chief Executive Officer Peter Carlsson. “The customer demand is so strong that we are accelerating our plans. We have taken a huge step on the way to create a new Swedish industry that will have a big impact in cutting our dependence of fossil fuels.’’To contact the reporters on this story: Ewa Krukowska in Brussels at firstname.lastname@example.org;Jesper Starn in Stockholm at email@example.comTo contact the editors responsible for this story: Reed Landberg at firstname.lastname@example.org, Brian ParkinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.