|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||53.70 - 54.06|
|52 Week Range||46.85 - 65.89|
|Beta (3Y Monthly)||0.91|
|PE Ratio (TTM)||13.18|
|Forward Dividend & Yield||2.17 (4.06%)|
|1y Target Est||106.94|
The German company Siemens is launching an ambitious adaptive reuse project to revitalize its historic corporate campus, with a modern data-collecting twist.
(Bloomberg) -- Austria may need to boost its renewable power generation by 50% to meet demand from steelmakers seeking to replace fossil fuels with hydrogen.The finding emerged at a discussion this week convened by the country’s biggest utility, which is probing the enormous consequences for electricity and carbon markets of efforts to rein in global warming.Verbund AG estimates that producing hydrogen in the volumes needed to help cut industrial emissions could take an additional 30 terrawatt-hours of renewable electricity annually -- equivalent to some 20 times the output of the world’s biggest offshore wind farm.“We have the resources and technology,” Verbund AG Chief Executive Officer Wolfgang Anzengruber said at a briefing in Fuschl, Austria. “Now, we have to come to a point where it’s cheaper to cut carbon dioxide than it is to pay a penalty for its emission. The cost of not doing so will become significantly higher.”Verbund is spearheading Austria’s drive to turn the universe’s lightest element into fuel for its heaviest industry.Clean-burning hydrogen could replace coal and coke in mills that currently release about 1.7 tons of carbon dioxide for every ton of steel manufactured. The sector accounts for as much as 9% of global carbon emissions, according to the World Steel Association.“What we need are power-to-fuel plants that are above all electrolysis plants,” said Katharina Beumelburg, a senior vice president at Siemens AG’s gas and power division, who was at the meeting. “The most important input is cheap, green electricity.”Siemens and Verbund are jointly developing Europe’s biggest electrolyser at Voestalpine AG’s steel plant in Linz, Austria. By the end of this year, that 6-megawatt unit is scheduled to begin feeding hydrogen into blast furnaces as a reduction agent to remove oxygen from iron ore.The steel industry could adopt hydrogen for between 10% and 50% of output by mid-century given the right carbon pricing, BloombergNEF analysts wrote in a report last month. The London-based researcher sees hydrogen technology becoming competitive with high-cost, coal-based plants by 2030.“Hydrogen will continue to be a growth market,” said Timur Gul, who heads energy technology policy for the International Energy Agency and also attended the Austrian meeting. The element is already widely used by chemical and fertilizer makers and is poised to “break out” in other sectors, he said.Austrian politicians agreed on 540 million euro ($597 million) renewable energy package on Friday that will build out wind and solar generation, according to a statement. The country is also looking at converting excess renewable capacity into hydrogen. The underground reservoir Austria has identified could hold gas equivalent to 92 terrawatt-hours of power.Verbund’s Anzengruber said his utility probably wouldn’t need to cover all of the new electricity demands required for producing hydrogen on industrial scales.“It could be that we import hydrogen like we do with oil right now,” the CEO said. “It could be cheaper to produce elsewhere.”(Adds new funding, hydrogen storage in the 11th paragraph)To contact the reporter on this story: Jonathan Tirone in Vienna at firstname.lastname@example.orgTo contact the editors responsible for this story: Reed Landberg at email@example.com, Rob VerdonckFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Siemens AG’s supervisory board meets Wednesday in Munich to select a new leader for its soon-to-be spun off energy division, a choice on which an even bigger decision hinges: who will be the next CEO of the German engineering giant.Two Siemens veterans are front-runners to take over the Gas and Power subsidiary from Lisa Davis, who is unlikely to continue in her role, according to people familiar with the situation. One is Michael Sen, who has spent most of his career at the company and has held roles including head of investor relations and most recently overseeing two other spinoffs. The other is Chief Technology Officer Roland Busch, said the people, asking not to be identified discussing private matters ahead of the board meeting.There’s obvious appeal to the energy position. With annual revenue of about 30 billion euros ($33 billion), the separated business would be a candidate for Germany’s prestigious DAX index, allowing its chief executive officer to join the hallowed club of 30 top corporate leaders. Both Sen and Busch have shown an appetite for bigger mandates, with the former in particular keen to run Siemens’s finance department, a role for which he was passed over some years ago.Risky ChoiceBut the risk for both men is that by accepting the position, they will take themselves out of the race for the more prestigious job running Siemens. Chief Executive Officer Joe Kaeser’s contract runs for another two years until the annual general meeting in 2021.“Kaeser has transformed Siemens to an immense degree,” said Daniela Bergdolt, a Munich-based lawyer representing individual investors at the DSW German association for shareholder protection.“We’d expect a successor to tackle that, and that they can lead Siemens to keep being a leader in industry.”The CEO has toyed with the idea of moving up to the chairman position after that. After orchestrating some of the most sweeping portfolio changes in the company’s history, Kaeser’s ambition lies less in an operating role, and more in the oversight that comes with being chairman, people familiar with the matter said. Among Kaeser’s most dramatic moves was to select the energy business for a spinoff, having already hived off the health-care, lighting and renewable energy assets.A spokesman for Siemens declined to comment ahead of the board meeting.Scheduled for separation next year, Sen would appear like a natural fit to run the business. Currently responsible for the separated Siemens Healthineers and Siemens Gamesa Renewable Energy SA, Sen’s experience with Siemens Gamesa would prove useful for a job leading Gas and Power. When that division gets spun off in 2020, it will absorb Siemens’s 59% stake in Siemens Gamesa.Previous ExperienceSen, 51, also has experience separating out units. Shortly after being passed over to become Siemens finance chief 2013, Sen left the company where he had spent his entire career and joined utility E.On, where he made CFO and oversaw the hiving off of the fossil-fuel business.Taking the power job would nonetheless be a compromise for Sen, who has been mentioned as a possible successor to Kaeser in German media reports. But if he were to take the position, it would clear the path for Busch -- another Siemens lifer -- to ascend to the top job. Busch, 55, has been chief technical officer since late 2016, and a member of the management board since 2011.He has also shown aspirations to oversee his own empire. It’s a career path that was blocked last year when competition authorities denied Siemens and Alstom SA their planned merger of rail assets, which Busch was supposed to oversee as chairman.Big PrizeWhile the Siemens CEO position is arguably the bigger prize, it’s also a position that no longer carries the same gravitas as it did under Kaeser and his predecessors. Siemens CEOs were traditionally the de-facto ambassadors of corporate Germany, accompanying chancellors on important global missions and running an empire spanning diverse products, from power turbines to high-speed trains to factory equipment and medical scanners.But in the last two decades, that all-encompassing conglomerate structure has given way to a much leaner Siemens, partly through spinoffs, partly through other disposals that removed once central assets like telecom equipment and health care.Kaeser has aggressively pushed the company to become more focused, saying he’d rather be in charge of a smaller house than handing the keys to an aggressive activist investor or having to sell units under duress. The downward spiral of rival conglomerate General Electric Co. has likely urged him on.Busch and Sen would be left with what Kaeser has called an industrial core comprised of factory automation, building automation and industrial software, along with stakes in the spun off entities.Involved ChairmanAnother possible complicating factor for any successor would Kaeser’s proximity to strategy and finance stemming from his years as CEO, and before that CFO. It’s a balance that German corporate governance guidelines have sought to address by suggesting a CEO should accept a two-year cooling-off period at the very least before becoming chairman, in order to allow the successor some breathing space. Most recently, Daimler’s AG’s longtime CEO, Dieter Zetsche, agreed to such a grace period before becoming chairman in a few years.If Kaeser succeeds in moving directly into the supervisory board -- a leap that requires shareholder approval -- it’s likely his presence there will be felt more than the average chairman. On paper, the job isn’t to interfere in the day-to-day activities overseen by the CEO. Supervisory boards principally check the executives, sign off on strategy and set the pay of top managers.But German corporate history is littered with examples of chairmen who wielded considerable power behind the scenes. Norbert Reithofer, chairman of BMW, is seen as a powerhouse whose approval matters in major decisions, as are Werner Wenning at Bayer AG and Wolfgang Reitzle at Linde Plc, who was known to have directed much of that company’s merger with Praxair Inc.Whoever leads Siemens in the future inherits a smaller, more focused company, with scaled-back ambitions. Kaeser’s overhaul has faced criticism from unions and investors that he has sold off the soul of Europe’s industrial champion. At a press conference in May, his answer was as simple as it was dismissive:“Those who’ve got a problem about these priorities, in the stock exchange, well, they are free to sell their Siemens shares,” he said. “It’s not a prison.”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, Benedikt Kammel, Tara PatelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Marco Krapels left Tesla Inc. and started a battery company in a place that’s a hemisphere away from California’s rarefied clean-energy scene: Brazil.Krapels, Tesla’s former vice president for international expansion of solar and storage, now runs Sao Paulo-based MicroPower-Comerc. The company, backed by Siemens AG, is pushing to use big mobile batteries to wean Latin America’s largest economy off oil-fired generators during blackouts.It won’t be easy. Brazil offers almost no government subsidies for renewable energy and imposes stiff import taxes. The nation’s market for big batteries, meanwhile, is hardly existent. Nonetheless, Krapels sees opportunity in a place with an occasionally unstable power grid and a robust market for wind and solar.“This is not for the faint of heart, but I think there’s an advantage on being the first to move into a market,” Krapels said by phone.Much of Brazil’s power sector is already carbon-free, with about two-thirds of electricity coming from hydropower. Developers have also aggressively developed wind farms in recent years, including in the breeze-rich region of Serra Branca. But businesses regularly turn to diesel generators during blackouts that are endemic in some areas.Krapels began exploring the potential for batteries in Brazil when he worked for SolarCity, which Tesla acquired in 2016. He wanted a large market with an unreliable power system and no significant government subsidies, which force companies to depend on political cycles. Brazil checked all those boxes.MicroPower, founded last year, offers to deliver on-site lithium-ion storage systems to big-box stores, hotels and other large commercial and industrial customers to use instead of diesel when lights go dark. The systems, which MicroPower owns and maintains, also allow customers to save money by storing up electricity at night when it’s cheap, then using it during the day when prices spike. The company has installed pilot systems at a Coca-Cola bottling plant and a McDonald’s restaurant.Comerc Energia, a Sao Paulo-based energy trading and management company, took an undisclosed stake in the company about 18 months ago. In July, Siemens’s investment arm took a 20% stake.One of MicroPower’s primary challenges is navigating Brazil’s complex tax and regulatory structure. The company doesn’t manufacture its systems, and Brazil’s import taxes tack on about 65% to its battery costs. To get around that issue, MicroPower is exploring buying battery components abroad and assembling them in Brazil, said Peter Conklin, a former SunEdison Inc. executive who co-founded MicroPower and is its chief operating officer.BloombergNEF expects cumulative global battery storage capacity to soar from 29.4 gigawatt-hours this year to 710.6 gigawatt-hours in 2029. The amount of storage in Brazil, however, is negligible, according to BNEF. While investors have begun to take interest in the market, storage companies have not gained much traction.“Intuitively it sounds quite attractive to combine resiliency with economic advantage within the commercial and industrial segment,” BNEF analyst Logan Goldie-Scot said. “But in practice that’s been quite hard to get off the ground.”To contact the reporter on this story: Laura Millan Lombrana in Santiago at firstname.lastname@example.orgTo contact the editors responsible for this story: Luzi Ann Javier at email@example.com, Joe Ryan, Pratish NarayananFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Osram Licht AG recommended a 3.7 billion-euro ($4.1 billion) takeover bid from AMS AG on the basis of price, risking a backlash from labor groups worried about potential job cuts that may come with the deal.The terms of AMS’s 38.50 euro-a share proposal eclipse Osram’s lingering concerns about how the takeover will be funded, the German lighting maker said in a statement on Monday. The Munich-based former Siemens AG unit had previously backed a lower offer from private equity groups Bain Capital and Carlyle Group LP.The show of support for AMS gives the Austrian sensor maker a boost in a months-long battle for Osram, which came into play after a series of profit warnings more than halved its share price over the course of a year. Bain and Carlyle are considering increasing their 3.4 billion-euro offer, people familiar with the matter said last month, which could switch the initiative back their way.Osram said differences remain with ASM over “some important strategic elements” that require further discussion, though that may not be enough to appease unions and employee representatives, who make up half of Osram’s supervisory board. They have questioned AMS’s planned savings from the deal, saying they would lead to job losses and facility closures in Germany.“The decision today was made against the wishes of the employee representatives,” said Johann Horn, leader of the IG Metall Bayern. “Even the management board is not convinced of the concept that AMS has tabled.”AMS Chief Executive Officer Alexander Everke defended his company’s credentials, saying its “commitments are the same if not better than that of Bain and Carlyle.” Osram shares traded 0.5% higher at 37.70 euros per share as of 10:24 a.m. in Frankfurt, while AMS declined as much as 4.9% in Zurich.Investor SupportMeetings between AMS and its investors across Europe, the U.S. and Asia over the last two weeks revealed “strong support” for its plan to buy Osram, AMS said in a separate statement on Monday. It reduced the minimum acceptance rate for its offer to 62.5% from 70%, though won’t be able to count on Osram CEO Olaf Berlien, who will not tender his personal stock.AMS shareholders still need to approve a capital raise to finance the transaction that will increase debt, but that “will be reduced to where it was before the deal within two years,” Everke said.The bidding war began in July, when AMS offered to counter a bid from Bain and Carlyle. AMS’s proposal was cleared last week by the country’s financial watchdog, allowing offers to remain open until Oct. 1.(Adds union comment in fifth paragraph. A previous version of this story corrected to say Osram recommended, not rejected, the offer by AMS.)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 Bowker, Andrew NoëlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Siemens and Orascom Construction signed an agreement on Saturday with the Iraqi government to rebuild two power plants in the north of the country that will have a combined capacity of 1.6 gigawatts. Siemens said that work at the Baiji facility, 250 km (155 miles) north of Baghdad, will commence once Iraq's Council of Ministers approve the deal and a financial agreement is reached with the Finance Ministry. Iraq signed five-year "roadmap" agreements with GE and Siemens AG last October under which the country plans to spend about $14 billion on new plants, repairs, power lines and, eventually, equipment to capture for use natural gas that is now being flared off.
ZURICH/MUNICH (Reuters) - Siemens board member Michael Sen is the favourite to lead its new standalone energy business, sources have told Reuters, removing one of the frontrunners from the race to succeed Joe Kaeser as head of the German industrial company. Sen is in pole position when the supervisory board of the Munich-based company meets on Wednesday to decide who will lead the business it is spinning off and floating, two people familiar with the matter told Reuters. The move could clear the way for Siemens Chief Operating Officer Roland Busch to lead the trains to industrial software company when Chief Executive Kaeser steps down.
(Bloomberg) -- The regulator who’s made a name for herself by cracking down on tech giants is about to get even more power.Margrethe Vestager was picked Tuesday by EU Commission President-elect Ursula von der Leyen to be her executive vice president in charge of the bloc’s digital affairs –- a post that will hand the Dane oversight of issues relating to artificial intelligence, big data, innovation and cybersecurity.Even more concerning for those hoping to avoid billion-dollar fines, Vestager, 51, will also keep her job as one of the most feared antitrust regulators. She squeezed huge penalties out of Apple Inc. and Google, rousing wrathful tweets from U.S. President Donald Trump. Washington’s ire only raised her own profile, making her a close-run candidate to head the EU commission and landing her with a potentially powerful role as vice president in charge of digital policy.Silicon Valley firms probably have the sense of “better the devil you know” when they see Vestager return for another five years, said Pablo Ibanez Colomo, a law professor at the London School of Economics. “They know pretty much where she comes from and know her style” of strict enforcement.While the Dane dealt coolly with criticism, claiming she didn’t deliberately target tech companies for antitrust and tax cases, she often shied away from attempts to settle investigations without fines. Being resolute won her admiration but also sparked irritation in Paris and Berlin when she blocked the Siemens AG and Alstom SA rail deal they favored. She’s spent the last few months trying to sell herself as a politician prepared to act on fears that Europe is being left behind by China and the U.S., especially on technology.One of her first acts after taking office in 2014 was to start up a stalled Google investigation that her predecessor had come under fire for trying to settle. The Alphabet Inc. unit had to hand over 8.2 billion euros ($9.1 billion) in fines for three probes, make changes that saw it start charging for its Android phone software in Europe and alter shopping ads. It still faces the risk of more fines from fresh investigations and complaints it isn’t complying with existing antitrust orders.Vestager’s new post lets her move beyond the limits of antitrust enforcement, often criticized for ordering too few changes too late to help less powerful rivals. She’s paid close attention to how internet platforms host smaller companies they also compete with, an issue for Amazon.com Inc. in a probe the EU opened in July and also the subject of complaints targeting Apple Inc. and Google.Her work is “not an attack on businesses, this is an attempt for democracy to shape our society,” she told reporters on Tuesday. She described her new role as helping to plug gaps identified by antitrust investigations, pointing to recent rules that allow small companies to get answers from internet platforms if they think they are being treated unfairly. The measures appear to target issues raised by the EU’s Google probes.“That is a kind of regulation that you might see more of,” she said. “We had the insight from the specific cases but that insight will also lead you to consider more regulation.”Vestager will take over as digital chief at a time when the European Commission is coordinating the bloc’s 5G security, grappling with what role Huawei Technologies Co. should play in the build-out of the infrastructure, as the U.S. urges Europe to block the Chinese telecom giant in spite of the risks posed by angering an important trade partner.France’s Sylvie Goulard, picked as internal market commissioner, will work more directly on defining standards for 5G mobile and next-generation networks, cybersecurity rules and response strategies, along with leading industrial and defense policy.Von der Leyen told Vestager to coordinate work on an EU approach on the ethical implications of AI within the first 100 days of the mandate and look at ways to share non-personal big data. She must also coordinate work to find international agreement on a tax on digital companies by the end of 2020 or to propose a fair European levy. And to deal with fears that China unfairly undercuts European firms, she has been told to tackle the distortion of foreign state ownership and subsidies.Vestager and other commission nominees face hearings in early October at the European Parliament before lawmakers vote on their posts.“She will be very positively seen and she’s intelligent and smart enough” to win over lawmakers, said Andreas Schwab, a German member of the parliament.(Adds comments from law professor and Vestager starting in fourth paragraph.)\--With assistance from Lyubov Pronina.To contact the reporters on this story: Aoife White in Brussels at firstname.lastname@example.org;Natalia Drozdiak in Brussels at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Peter ChapmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Ever since humans first rode in an elevator more than a century ago we’ve been afraid of getting stuck in one (or worse). The related requirement that these modern marvels are serviced and upgraded regularly is pretty handy for industry leaders Otis, Kone Oyj, Schindler and Thyssenkrupp AG. The companies generate about half their elevator revenues this way, as opposed to the lower-margin sales of original equipment.In good years Otis and Kone have achieved an operating return on sales in excess of 14%. That’s decent for the industrial sector, although a competitive Chinese market has made things more difficult lately.Tough safety regulations and the need to support big teams of technicians are a natural defense against new competitors. The four companies I mentioned have locked up more than 60 percent of the elevator market. Three of them are European.(1)The decent profitability and oligopolistic industry structure are big attractions for would-be acquirers of Thyssenkrupp’s elevator unit, which the German conglomerate has put up for sale. But the big four’s dominance won’t have gone unnoticed by antitrust officials, who could play a central role in determining how any further consolidation plays out.Depending on the bidder, any political desire to build a European elevator champion may run into resistance from those who fear entrenching the power of already dominant companies (as happened when Germany’s Siemens AG and France’s Alstom SA tried to merge their rail businesses).Thyssenkrupp isn’t the only active player in the industry. United Technologies Corp.’s move to spin out its Otis elevator unit has triggered speculation that the U.S. manufacturer might also get involved in M&A. Last week, Switzerland’s Schindler denied a report that it had been targeted by its American rival. Finland’s Kone, meanwhile, is open about wanting to buy the Thyssenkrupp business, telling the Handelsblatt newspaper last week that the two companies would be “a perfect fit.”Combining Kone and the Thyssenkrupp unit would create an industry behemoth with more than 16 billion euros ($17.7 billion) of sales. Though weaker than Kone’s, Thyssenkrupp’s elevator earnings have tended to far outstrip what the unwieldy German conglomerate makes from its other businesses. Its future should be bright too.Urbanization, aging populations and more single-person households are all spurring the construction of denser, taller residential buildings, especially in Asia. China accounts for more than 60% of the world’s new elevator installations.It’s reasonable to think the Thyssenkrupp elevator business would be worth about 15 billion euros if carved out – double the value investors ascribe to the whole conglomerate today. Add a premium for potential synergies and the value could rise further. Kone and Thyssenkrupp would complement each other well: the former is stronger in China while the latter has a bigger U.S. business. And the potential procurement, research and labor force savings from a merger would surely beat any earnings improvements that a private equity buyer could deliver by itself.The big question is whether antitrust officials would agree to two of the big four elevator firms merging? It’s barely a decade since the European Union smacked the companies with almost 1 billion euros in fines for running a price-fixing cartel in several countries. Company employees rigged bids involving hospitals, the European Commision noted. Hardly a good precedent.Thyssenkrupp is burning cash and its stock has fallen more than 35% in the past year. It can ill afford to get involved in another protracted and ultimately unsuccessful antitrust review. Earlier this year Brussels blocked an attempt to combine its European steel operations with Tata Steel. Kone could sell certain assets to ease competition concerns. Still, it’s understandable that Thyssenkrupp is said to favor a partial sale to private equity, according to Bloomberg News’s Aaron Kirchfeld and colleagues. This might not realize the highest price but it’s surely the easier deal to pull off, provided trade unions can be reassured.Europe has three world-beating elevator makers. Reducing the trio to two has clear benefits for the companies. What’s in it for customers isn’t quite so obvious. (1) The maintenance business is more fragmented, however.To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
General Electric is making major changes after a brutal couple of years. Here is what the fundamentals and technical analysis say about buying GE stock now.
One of Germany’s leading industrialists has criticised the Merkel government’s insistence on balanced budgets, saying the government should be taking advantage of historically low interest rates to invest ...
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. German Chancellor Angela Merkel told Chinese Premier Li Keqiang that Germany remained open to business even as her government raises barriers to investments in sensitive areas.Germany’s tightened investment rules are meant to vet outside investors in strategic sectors, Merkel told reporters at a joint press conference with her Chinese counterpart in Beijing on Friday at the start of a two-day visit to China. Li pledged that China would further open its economy.“Not every assessment means that every investment is blocked, rather in strategic or sensitive areas that have to be looked after -- still, Chinese investors are welcome,” Merkel said. She also urged an end to the China-U.S. trade war to return calm to global markets.The chancellor faces a delicate set of policy objectives during the visit, in which she’s being accompanied by a delegation of some 25 business leaders, including executives from Volkswagen AG, Deutsche Bank AG and Siemens AG. The German leader is seeking to maintain a tougher stance with Beijing while urging a resolution of the trade war and continuing to press for reciprocal access to China’s lucrative market.Germany is toughening its policy toward China on matters such as investment and intellectual property, joining governments from Japan to Canada and Australia taking a harder line on China as President Donald Trump steps up his trade war. But it’s an especially high-risk strategy for Berlin at a time when its export-dependent economy is flirting with recession.The German leader said her goal is for trade relations with China to be an example for multilateral trade amid tensions in the global order. She cited the “urgency” of clenching an investment accord by the second half of 2020. That’s when Germany plans to host a an EU-Chinese leaders’ summit.Indicative of Merkel’s balancing act is her approach to the unrest in Hong Kong. While her administration urged Beijing to engage in dialog and respect the rule of law, Merkel has declined an invitation to meet with protesters.Hong Kong citizens’ “rights and freedoms must of course be guaranteed,” Merkel said alongside Li on Friday.The visit got off to a bumpy start when Chinese authorities initially blocked German media based in Beijing from attending the Merkel-Li press conference, a government spokeswoman in Berlin confirmed. Only after the German government intervened were four local journalists allowed in, she said. Adding to the awkwardness was the protocol during the military ceremony in front of the Great Hall of the People. While Merkel sat during the playing of the Chinese anthem, Li rose from his seat.After a series of shivering fits during the summer, Merkel has resorted to sitting during military parades. All other leaders she has received since then, including U.K. Prime Minister Boris Johnson, had also remained seated.Chinese state media advocated more open markets between Germany and China, stressing opportunities for cooperation ahead of Merkel’s visit, including areas such as climate change and trade.“There is an urgent need for Germany and China to safeguard an open global economy and ensure that normal international trade should not be disrupted by protectionist tariffs,” the official Xinhua News Agency said in a commentary.Merkel later met with Chinese President Xi Jinping, who hosted a dinner for the German leader. Xi told Merkel that China would continue to open its economy in sectors including manufacturing, services and finance, according to Xinhua.(Adds German spokesman in ninth paragraph.)\--With assistance from Jihye Lee.To contact the reporters on this story: Patrick Donahue in Berlin at email@example.com;Dandan Li in Beijing at firstname.lastname@example.org;Arne Delfs in Berlin at email@example.comTo contact the editors responsible for this story: Brendan Scott at firstname.lastname@example.org, Raymond ColittFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
German Chancellor Angela Merkel said at the start of a visit to Beijing on Friday that the China-U.S. trade war was affecting the whole world and she hoped it would be resolved soon. Germany's firms have been caught in the crossfire of a U.S.-China trade conflict, its economy - Europe's largest - contracted on weaker exports in the second quarter, and leading economists say it is facing a recession, especially after weak industrial data published this week.
Russian conglomerate Rostec has sold its stake in a sanctioned technology company that was embroiled in a scandal over the installation in annexed Crimea of turbines made by Germany's Siemens , Rostec told Reuters on Thursday. The 17.34% stake in Interavtomatika was sold by Rostec unit Tekhnopromexport in June to a Russian research institute for 67 million roubles ($1 million), a filing at the state bankruptcy registry showed.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.When Siemens AG sold a corporate bond at the most negative yield ever recorded, there was disappointment -- by those who were left out.In Vienna, money manager Thomas Neuhold at Gutmann Kapitalanlage AG expressed regret that he didn’t have enough cash Tuesday in a busy day of corporate issuance to put in an order for the oversubscribed 3.5 billion euros ($3.9 billion) sale. Paying a company to lend to it for two to five years is preferable to accepting below-zero yields on German government debt for three decades, according to Neuhold.“Compared to all other options, short-term corporates are the least bad option,” said the money manager at the 9 billion euro asset firm. “I still see much more reason to buy a negative-yielding short term Siemens than a 30-year bund.”That sentiment is opening the door to an unprecedented wave of deals that allow companies to lock in below-zero yields in the primary market, in effect being paid to borrow. The stockpile of negative obligations across all markets just hit a record $17 trillion, and could swell further as markets gripped by recession fears drive government benchmarks to record lows.More market participants may share Neuhold’s regret over Siemens’ bonds. Those who got in at issue reaped a quick paper profit as the notes are quoted above issue price on their second day of trading. The sale, in four maturities, included two-year notes yielding -0.315%, based on data compiled by Bloomberg. A five-year portion also featured a negative yield, while tranches due in 10 and 15 years paid positive yields. German debt due in 2050 yields -0.22%.A fresh injection of European Central Bank stimulus in coming weeks is expected to push yields even further below zero, potentially spurring gains for traders of negative-yielding bonds so long as they don’t hold the debt to maturity.JPMorgan Chase & Co. expects that it will soon be commonplace for European companies to stamp negative yields on new borrowings. Trading levels of companies with the same ratings as German industrial giant Siemens, single A, show they can basically borrow for free in euros, according to a Bloomberg Barclays index.“Investors may try to push back on some of the initial deals, but within a few months they will be considered relatively normal structures,” JPMorgan strategists including Matthew Bailey wrote in an Aug. 23 note.Read More: The Black Hole Engulfing the World’s Bond MarketsCompanies have issued more than 6.5 billion euros of new bonds this year at negative yields, where they levied a cost on investors for the privilege of lending to them. Before this year, just four issues totaling 2.5 billion euros were sold with negative yields, according to Bloomberg data.It’s a development that flummoxes Christian Hantel, a portfolio manager at Vontobel Asset Management AG, who’s spent the past 15 years analyzing and investing in corporate credit. He decided not to participate in the new issue from Siemens and doesn’t regret it.“This shows how distorted the market is,” said Hantel, who’s looking for U.S.-dollar denominated alternatives.But even the most resolute investors may soon grow to accept negative yields on new corporate debt, according to JPMorgan strategists. “Investors still have cash to deploy, and few other alternatives to buy,” they wrote.(Adds details on previous issues in ninth paragraph.)To contact the reporter on this story: Tasos Vossos in London at email@example.comTo contact the editors responsible for this story: Hannah Benjamin at firstname.lastname@example.org, ;Vivianne Rodrigues at email@example.com, Cecile Gutscher, Sid VermaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(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.
MxD today announced a comprehensive workforce development program for cybersecurity in manufacturing, underwritten with a $1.25 million grant from the Siemens Foundation. The grant will fund the development and implementation of a highly-skilled cybersecurity for manufacturing initiative as part of MxD’s workforce strategy known as MxD Learn.
We continue to believe that equities are the place to be for those with the stomach and time horizon to ride out the current trade turbulence and navigate the headwinds that constantly blow both in the U.S. and around the world, asserts John Buckingham, money manager and editor of The Prudent Speculator.
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.