|Bid||116.88 x 44200|
|Ask||116.88 x 100000|
|Day's Range||116.66 - 117.62|
|52 Week Range||84.42 - 119.62|
|Beta (3Y Monthly)||1.06|
|PE Ratio (TTM)||18.48|
|Earnings Date||Feb. 5, 2020|
|Forward Dividend & Yield||3.90 (3.38%)|
|1y Target Est||N/A|
(Bloomberg Opinion) -- Hedge funds have got AMS AG over a barrel. The Austrian sensor maker this week made a desperate-sounding appeal to shareholders in Osram Licht AG to accept its 4 billion-euro ($4.4 billion) offer for the German lighting group, amid signs that merger arbitrage investors with a big block of Osram shares might not be ready to sell all of their stock. There are no easy options for AMS, and the market knows it.The stand-off began in September when AMS first made the offer and subsequently mopped up a 20% Osram stake to see off a possible counterbid from private equity. But AMS has just replaced one enemy with another. Existing Osram shareholders sold and hedge funds probably control a sizeable stake now.AMS’s offer failed to get the required acceptances, so the aspiring buyer returned a few weeks later with the same bid price and a lower hurdle for acceptance by the target’s shareholders, this time 55%. But there’s a risk it won’t reach that lower level either.For starters, Osram’s register includes a large portion of Siemens AG shareholders who received stock when the lighting company was spun off from the German industrial giant. They might not even be aware that they own the stock.At the same time, hedge funds have a financial incentive to not to sell at least part of their holdings. With just over half of the shares, AMS would control Osram’s governance but not its cash flow and it’s hard to believe this isn’t its ultimate ambition. To get there, it would need to deliver 75% of the votes cast at a shareholder meeting. The ideal situation for the hedge funds is that AMS gets slightly above 55% and then feels compelled to pay them extra for the additional 10-20% of the stock it would need for genuine control.But the more the hedge funds keep hold of their stock to play this so-called “back-end” trade, the less likely it is that AMS will get even the 55% acceptances needed for its offer to prevail. Hence the current stand-off.AMS has tried to put the frighteners on the hedge funds, warning that it won't raise its offer and that it might not come back with another bid. The difficulty for the Austrian company is its blocking stake: If it walks away, it might struggle to sell that without taking a potentially big loss. That’s a reason to hang on. It would have been better to have secured provisional acceptances from Osram holders rather than spending money on a stake.What’s more, it’s plausible that AMS might want to have another go at Osram in six months’ time. By then, it would have probably secured regulatory approvals for the acquisition. That would let it buy shares in the market taking its holding higher. If its stake crossed 30% it would be required to make a mandatory offer, with that back-end trade coming back into view.Things might be simpler if one single hedge fund — for example Elliott Management Corp. — had emerged as a dominant force to negotiate a grand bargain. As things stand, the register is fragmented and hopes for a deal rest on assuming that the funds will act in their collective interest, instead of acting in their own interest and holding shares back. Good luck with that.AMS’s lowering of the acceptance threshold looks like a tactical error that perversely may be encouraging individual shareholders to think the bid doesn’t need their help to scrape through. Meanwhile, Osram’s staff are enduring terrible uncertainty. It’s a mess for everyone.To contact the author of this story: Chris Hughes at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
A Russian firm part-owned by Siemens that was hit by sanctions for its role in installing the German company's turbines in Crimea has started liquidation proceedings, according to filings to a Russian companies database. German conglomerate Siemens owns a 46% stake in Interavtomatika, which installs automated control systems in power plants and works with products manufactured by Siemens or those under its licence. In 2017 Russia installed turbines bought from Siemens at power stations in Crimea, which it annexed in 2014.
Michael Sen is stepping down as the chairman of Siemens Healthineers so that he can focus on his future as the chief of Siemens' energy businesses, the German healthcare technology company said on Wednesday. The move comes as Siemens makes plans to split off its energy units from its core industrial business, which includes its digital, mobility and healthcare arms. Sen, currently the co-CEO of Siemens' gas and power operating division, is slated to become the CEO of the newly formed Siemens Energy, which is scheduled to list publicly in September 2020.
Today we are going to look at Siemens Aktiengesellschaft (ETR:SIE) to see whether it might be an attractive investment...
(Bloomberg) -- Siemens AG is considering buying Iberdrola SA’s 8% stake in Spanish wind-turbine maker Siemens Gamesa Renewable Energy SA to bolster its energy holdings, according to people familiar with the matter.Siemens could pay a premium to the current value of about 720 million-euros ($793 million), bringing its holding to about 67%, said two of the people who asked not to be identified because the matter is private.An eventual move to acquire the rest of the outstanding shares in Siemens Gamesa is possible at a later date, the people said. No decision has been made and there’s no certainty the deliberations will lead to a transaction, they said.Representatives of Siemens, Iberdrola and Siemens Gamesa declined to comment.Siemens Gamesa shares rose 8.5%, the most in almost 10 months, while Siemens closed 1.4% higher and Iberdrola gained 0.3%.A move by Siemens to strengthen its hold over its energy businesses would come in preparation of a planned spinoff next year of its struggling power and gas unit -- dubbed Siemens Energy -- which will hold a 59% stake in Siemens Gamesa. The acquisition of all of Siemens Gamesa would remove a layer of complexity in the operation and the structure of the future listed company.Siemens’s Chief Executive Officer Joe Kaeser said in an interview earlier this month that he aims to shed about 75% of the energy division over time. The power and gas unit is Siemens largest by revenue but has the lowest profit margin. It has struggled for years with a slump in global orders for thermal power plants.Read more: Siemens CEO Seeks to Shake Up Company With Energy Spinoff (1)Kaeser has spun off a series of activities in recent years including renewable energy and health care. In 2016, Siemens and former rival Gamesa Corp Technologica SA struck a deal that saw the German company injecting its wind turbine operations into the Spanish counterpart in exchange for a stake.At the time, the Spanish securities regulator exempted Siemens from making a mandatory offer to Gamesa’s other shareholders. Iberdrola said its shareholder agreement with Siemens initially gave it the right to name two directors to the board. It currently has one.The tie-up hasn’t always been smooth, with synergies falling short of what has been needed to offset lower turbine prices, increased competition and a dip in demand. Frictions were laid bare late 2017, when Iberdrola’s Chairman Ignacio Galan said “we can’t be happy with a company whose value has declined by more than 50% in six months.”What Bloomberg Intelligence SaysA purchase by Siemens of the Iberdrola stake “could simplify any spinoff of Siemens Energy. The interest indicates enduring underlying wind-business support, despite weaker-than-expected 2020 Siemens Gamesa sales goals.”\--James Evans, clean energy analystSiemens has said the planned spinoff would be a “powerful pure play” in energy and electricity. The power and gas division has operations spanning oil and gas as well as conventional generation and transmission, while Siemens Gamesa develops wind farms and makes renewable energy equipment.(Updates with detail about board in ninth paragraph, closing shares)\--With assistance from Charles Penty.To contact the reporters on this story: Eyk Henning in Frankfurt at firstname.lastname@example.org;Oliver Sachgau in Munich at email@example.com;Rodrigo Orihuela in Madrid at firstname.lastname@example.orgTo contact the editors responsible for this story: Kenneth Wong at email@example.com, Tara Patel, Ben ScentFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- To get Brooke Sutherland’s newsletter delivered directly to your inbox, sign up here.A once mighty engine of profit for Siemens AG and General Electric Co. isn’t dead just yet, but the business will remain a ghost of its former self. The market in question is gas turbines, equipment that sits at the heart of natural gas power plants and helps to generate electricity. A glut of capacity and the reduced cost of renewable energy tanked demand for these engines, sparking years of painful slides in profitability and massive rounds of cost-cutting. Recently, though, orders have started to perk up modestly; regions such as China are converting to gas from coal or nuclear power, while elsewhere there is a growing recognition that the flexibility and reliability of turbines gives them a role to play even in a world tilting increasingly toward alternatives. In what may be a nod to this recent improvement, Siemens CEO Joe Kaeser told Bloomberg News this week that the company may keep only a 25% stake in the struggling energy unit it plans to spin off. That would constitute a more extensive break than what was envisioned when Siemens announced the overhaul in May with the intention of retaining a “somewhat less than 50%” holding — seemingly a bet that the apparent bottoming in demand will entice more support from the public market.Indeed, Siemens saw a 9% increase in comparable orders in its gas-and-power division in the fiscal fourth quarter and said its market share in large gas turbines held roughly steady in 2019. Deutsche Bank AG analysts led by Gael de-Bray this week outlined a path for a 20% recovery in Siemens gas turbine orders to 10 gigawatts annually. The analysts acknowledge this is an out-of-consensus view, but even GE, the poster child for gas power woes, has seen business come in better than expected. Year to date, GE logged gas power orders of 12.8 GWs, compared with 7.2 GWs in the same period in 2018, Chief Financial Officer Jamie Miller said on the company’s third-quarter earnings call. That adds support to CEO Larry Culp’s optimism that overall market volume may exceed GE’s dire forecast of just 25 to 30 GWs at the beginning of the year. This recent stabilization in demand is encouraging, but the question isn’t just whether companies can attract orders, but whether they can deliver them and any associated maintenance work profitably. The Deutsche Bank analysts estimate the Siemens Energy spinoff (which includes a 59% stake in Siemens Gamesa Renewable Energy SA) can reach its goal of doubling its adjusted profit margin to about 8% by 2021, a reflection of growth in more profitable service work and targeted cost savings of 700 million euros. Progress is progress, but it should be noted that an 8% margin isn’t exactly blockbuster profitability, and that number reinforces the idea that there is a more structural shift in the power market that will keep a lid on further improvements.GE, for its part, has said fixed costs are down 9% year to date in the gas power business, although it has also pushed out some restructuring work, in part because negotiations in Europe are taking longer than expected. Its own gas-power service revenue has declined in the past three quarters. Even so, Melius Research analyst Scott Davis has argued there’s no structural reason that margins can’t return to the mid-teen levels of yesteryear. He bases this in part on the idea that Siemens, as its top competitor, cares deeply about boosting its own margins and that will help keep pricing rational. In response to that, I would point you to the other power market news making the headlines this week: Mitsubishi Heavy Industries CEO Seiji Izumisawa is leaving the door open to a combination or collaboration with Siemens’s power business once it’s carved out. Siemens had reportedly been in talks to merge the gas-turbine business with Mitsubishi before deciding to go ahead with the spinoff instead.(1) “We do have a good relationship with Siemens,” Izumisawa said in an interview at Bloomberg Headquarters this week. “I will not deny the possibility that we could possibly work with them.”Such a move would substantially shift the competitive landscape, and it’s far from clear that Mitsubishi would have the same discipline if it was in charge of the pricing for Siemens’s new units and service agreements. Asked whether market share or profitability was more important amid weak demand for turbines, Izumisawa said that the most important thing was for the business to make money and generate value for shareholders, but within that, there’s an understanding that after-market services are responsible for most of the profit in the gas turbine business. That gives the company an interest in making sure it’s delivering a consistent number of units, he said. While Izumisawa said the Siemens spinoff doesn’t directly affect Mitsubishi’s business strategy, he acknowledged competition is only getting tougher. Siemens’s Kaeser has spoken about the likelihood that China will want its own national champion to capitalize on an expected boom in gas power demand as the country converts from coal. To that end, Izumisawa touted the productivity and reliability benefits offered by Mitsubishi’s high-efficiency J-series turbines as a tool for luring customers. The company’s estimate of greater than 64% efficiency for that product exceeds the 62.2% for GE’s 9HA turbine, and Mitsubishi is working to further expand that lead with its next generation turbine, Gordon Haskett analyst John Inch wrote in a June report. Here I will remind you that GE has cut R&D at its power unit substantially over the past few years. Point being, demand may be stabilizing, but the market is only getting more competitive. LEAKING FUELSome worrying signals for the aerospace market emanated from the Dubai Air Show this week. Emirates trimmed order commitments for both Boeing Co. and Airbus SE jets, with the reductions adding up to $24 billion at list prices. Big aircraft like Boeing’s 777X are falling out of favor as weakening demand and fare competition sparks concern about airlines’ ability to fill the planes profitably. Emirates will take 126 777X jets, including six orders for older models that were upgraded to the newest version, and 30 of Boeing’s smaller 787 Dreamliners. All in, that’s 40 fewer planes than planned. The airline upped its order for Airbus’s A350 wide-body jet, but seemingly scrapped a commitment for 40 A330neos that was part of the original deal, resulting in a net loss.A bright spot was Airbus’s longer-range A321 XLR model. Boeing’s counter to that, a potential new middle-market aircraft, remains a question mark amid the continuing crisis engulfing its 737 Max. The more orders Airbus is able to rack up in the meantime, the weaker the business case for that Boeing jet. Airbus is already moving on: The manufacturer talked about developing a narrow-body jet by the end of the 2020s if key technologies are available, likely kicking off a new front in the arms race with Boeing, notes Bloomberg Intelligence’s George Ferguson. The MCAS software system blamed for the Max’s two fatal crashes was installed to make up for the fact that the existing 737 model infrastructure was less adaptable to more fuel-efficient engines. Clean-sheet development programs like the one Airbus is contemplating won’t come cheap and the fact that the planemakers’ are considering them speaks to a potentially more structural shift away from wide-bodies in the current demand environment. DEALS, ACTIVISTS AND CORPORATE GOVERNANCE Thyssenkrupp AG’s plan to sell off its prized elevator division got more complicated this week. The company plunged the most since 2000 on Thursday after warning that a deepening cash crunch would force it to suspend dividend payments. Selling off the entire elevator business – whose exposure to the growing urbanization trend makes it a rare bright spot for Thyssenkrupp – would bring in much needed cash to fund restructuring for the remaining steel, submarines and industrial businesses. But that would also deprive Thyssenkrupp of its top source of cash flow should the turnaround plan fail to gain traction. Binding bids for the elevator unit are due in mid-January, people familiar with the matter told Bloomberg News. Rival Kone Oyj has partnered with private equity firm CVC Capital Partners for a bid and has reportedly offered a sizable breakup fee to help convince Thyssenkrupp to put aside antitrust concerns. Also in the running are a consortium of Blackstone Group Inc., Carlyle Group LP and Canada Pension Plan Investment Board; an Advent International, Cinven and Abu Dhabi Investment Authority team; Brookfield Asset Management; Asian private equity firm Hillhouse Capital, whose connection to China may also draw scrutiny; and 3G Capital, which is better known for its troubled food investments.Cobham Plc’s planned sale to Advent International advanced a step this week after the U.K. government said it was likely to accept remedies designed to address national security concerns over the $5 billion takeover of a military supplier. The deal still risks being caught in the political crossfire with a final ruling not expected to come until Dec. 17, five days after the U.K. general election. The opposition Labour Party has taken a dim view of the deal amid a spike in foreign acquirers taking advantage of the pound’s Brexit-fueled weakness. The deal has few benefits for Britain, but a block on purely protectionist grounds would set a bad precedent, as my colleague Chris Hughes has written. “If the U.K. merely rues that Cobham is worth more in U.S. hands, it should instead ask whether past industrial policy is to blame and learn the lessons,” Chris writes. Approval likely comes with some strings, though, including job commitments and potentially an agreement to keep Cobham’s headquarters in the U.K.BONUS READINGAmazon Has Become America’s CEO Factory The Inglorious End of the Airline Mile as a Unique Travel Reward Conoco's 2020s Plan Is to Embrace the FUD: Liam Denning Amtrak CEO Has a Plan for Profitability, and You Won’t Like It General Motors Declares Corporate War on Fiat: Chris Bryant Major TARP Survivor Sees Warning in Exuberant Florida Developers(1) That was likely a reflection of an unwillingness by Kaeser (who’s due to retire in 2021) to risk having another bruising fight with European antitrust regulators slow down his plans for a boosted valuation.To contact the author of this story: Brooke Sutherland at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Siemens AG aims to shed about 75% of its struggling power and gas unit in one of the most radical moves to date by Chief Executive Officer Joe Kaeser to untangle the sprawling conglomerate and try to boost its valuation.The Munich-based industrial giant wants to “massively deconsolidate” the division to make the parent company more manageable and less risky, Kaeser said in an interview.“I do expect a big majority from shareholders to spin off the energy business,” he said. “Over time, it could be all the way down to somewhere around 25% plus one” share.With this stake size, in what was once a flagship operation, the parent company would still be able to block major strategic decisions.Siemens unveiled a broad plan in May to list most of power and gas, and still needs investor approval. Kaeser’s comments reveal details on the move that could prove to be the cornerstone of his strategy to break apart Europe’s largest industrial company on his own terms, and avoid the painful situations encountered by rival conglomerates like General Electric Co. and ABB Ltd.Kaeser, 62, is working to a 2021 deadline when his mandate is set to end. In September Roland Busch was appointed deputy CEO. “It’s the first time in 15 years that we’re doing a real succession plan. And it is a good plan,” Kaeser said.Read more: Siemens Reshuffle Puts Busch in Line to Succeed CEO Kaeser (1)Yet the CEO said he’s taking no chances and would be willing to extend his contract should the plan unravel.“I would never leave the company behind in disarray,” Kaeser said. “In the totally unexpected and unlikely case that it doesn’t work out then, I could imagine to commit to two more years.”Mitsubishi Heavy Industries Ltd.’s CEO said he would consider a tie-up with the Siemens energy operations after a spinoff. “We could possibly work with them,” Seiji Izumisawa said in a separate interview. He didn’t rule out a possible purchase. “That would depend upon what kind of assets the spinoff actually had and what kind of a combination or collaboration could be achieved.”Kaeser has sought to transform Siemens ever since he took over as CEO in 2013. He has cut thousands of jobs, slashed costs and shed or spun off assets including the health care and renewable arms. He failed on one major front: a bid to merge the group’s rail operations with rival France’s Alstom SA. That deal was shot down by European antitrust authorities.Kaeser’s efforts came as conglomerates fell out of fashion with shareholders and became the targets of activist investors, which was the case with larger rival GE and ABB.The proactive approach has helped Siemens to fare better than GE in the past few years, yet it is trailing more focused peers including Schneider Electric SA and Emerson Electric Co. in terms of profitability and share price.What Bloomberg Intelligence Says“Progress on its strategy will be key to lowering the conglomerate discount that’s holding back its valuation.”\-- Johnson Imode, industry analystPower and gas had 19.3 billion euros ($21.4 billion) in sales in the last fiscal year, making it the largest division by revenue. Its operations have been hit by tectonic market shifts away from large power plants to more renewable resources. The new company -- which will likely be a candidate for Germany’s top Dax equity index -- will also include a 59% stake in Siemens Gamesa Renewable Energy SA, which develops wind farms and makes renewable energy equipment.Kaeser dismissed any doubts raised by analysts that union and political resistance could prevent the separation. He said he used a metaphor about buckets to win over labor representatives making up half the supervisory board.The first bucket, Siemens’s Digital Industries unit, is relatively stable and has a 17% return, he said. The second one, a division called Smart Infrastructure, is a similar safe investment with a margin of about 11%. Siemens is holding on to both of these.The bucket containing Siemens energy has a 5% margin and is more volatile, hence a more risky investment, he said.“So where do you put your money down?” Kaeser asked, making the point that the units appeal to different categories of investors.(Updates with comment from Mitsubishi Heavy in ninth paragraph.)\--With assistance from Richard Clough.To contact the reporters on this story: Oliver Sachgau in Munich at firstname.lastname@example.org;Eyk Henning in Frankfurt at email@example.comTo contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, Tara Patel, Daniel SchaeferFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Mitsubishi Heavy Industries Ltd. would consider a tie-up with Siemens AG’s energy operations following a planned spinoff of the German business.“We do have a good relationship with Siemens,” Mitsubishi Chief Executive Officer Seiji Izumisawa said Wednesday in an interview at Bloomberg’s New York headquarters. “When the spinoff happens, I will not deny the possibility that we could possibly work with them if that does present itself as an opportunity.”The Japanese manufacturer is looking to bolster its standing as one of the world’s top producers of large gas turbines as the market starts to recover from a steep downturn. Mitsubishi Heavy had held talks about a possible combination with Siemens’s power business before the decision was made to spin it off, Bloomberg reported in March.While Mitsubishi is taking a “cautious” approach to mergers and acquisitions while global volatility weighs on order volume, Izumisawa didn’t rule out a purchase as one option he would consider. “That would depend upon what kind of assets the spinoff actually had, and what kind of a combination or collaboration could be achieved,” he said through a translator.To contact the reporter on this story: Richard Clough in New York at email@example.comTo contact the editors responsible for this story: Brendan Case at firstname.lastname@example.org, Tony Robinson, Susan WarrenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- “Technological sovereignty” is one of the European Union’s buzzwords of the moment, conjuring up an image of a safe and secure space for zettabytes of home-grown data, free from interference or capture by the U.S. and China.Both France’s Emmanuel Macron and Germany’s Angela Merkel have used the phrase to kick-start all sorts of initiatives, from artificial intelligence programs to state-backed cloud computing. The new European Commission president Ursula Von der Leyen has etched the concept into her political guidelines.It’s a noble goal, if only because it acknowledges Europe is anything but technologically sovereign right now. The internet behemoths are in America and China — Alphabet Inc., Facebook Inc., Amazon.com Inc., Alibaba Group Holding Ltd — and an estimated 92% of the Western world’s data is stored in the U.S., according to the CEPS think tank. China accounts for more than one-third of global patent applications for 5G mobile technology. Amazon boasts that 80% of blue-chip German companies on the DAX exchange use its cloud services business AWS. The trigger to do something about it is the race for supremacy between Beijing and Washington, which is spilling over into the tech sector and undercutting the EU’s ability to protect its turf. President Donald Trump’s ban on Huawei Technologies Co. and his attempts to bully allies into doing the same was a wake-up call, however valid his security concerns. The U.S. “Cloud Act,” which forces American businesses to hand over data if ordered regardless of where it’s stored, was another. Both China and the U.S. see the EU as an easy mark in the global tech tussle. And they’re right. Europe’s problem is that recapturing sovereignty is neither easy nor cheap. Take cloud computing, one area where France and Germany are eyeing the building of “sovereign” domestic infrastructure for use by national and European companies. This is a $220 billion global market dominated by U.S. suppliers with market values of close to $1 trillion, which invests tens of billions of dollars every year on infrastructure. Their power isn’t just technological: When Microsoft Corp. spends $7.5 billion on an acquisition such as GitHub, a forum for open-source coding, it’s bringing valuable developers into its own orbit. Likewise, Amazon’s AWS has the scale, cheap pricing and perks that lock in customers.France and Germany won’t win a head-on battle in this field. Paris is still smarting from a failed attempt years ago at building a sovereign cloud for the princely sum of 150 million euros ($165 million). Germany has Gaia-X, which looks like a common space for the sharing of data by the leading lights of the DAX , from SAP SE to Siemens AG. It’s hard to see how such initiatives will lead to true digital sovereignty, though; not just because of a lack of serious investment, but because it’s hard to avoid using U.S. cloud tech.Still, it wouldn’t be a bad thing if this trend led to France and Germany collaborating more — laying the groundwork for more ambitious spending — and to Brussels doing what it does best: setting the rules of engagement for tech companies everywhere. Digital commissioner Margrethe Vestager is already demanding tougher enforcement of data protection laws and taking a consistently muscular approach to antitrust violations by the Silicon Valley and Seattle giants. It’s not sovereignty, but it’s a start.To contact the author of this story: Lionel Laurent 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.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Siemens Chief Executive Joe Kaeser on Friday lamented Germans who fail to recognise true visionaries and instead admire pot smokers who talk about space travel, only days after his deputy praised Tesla CEO Elon Musk. "Amusing opinions in our country: When a German chief executive proactively orients his company toward the future, he is regarded as 'lofty' and 'philosophical'. Kaeser's statement sparked a lively debate on social media, with the Siemens CEO later seeking to clarify his comments.
European shares rose for a fifth straight session on Thursday to hit fresh four year highs as investors cheered signs of progress in U.S.-China trade talks and largely positive earnings reports from a host of companies. Shares of Siemens hit their highest in more than a year after the German industrial company beat fourth-quarter profit expectations, while Italy's biggest bank UniCredit rose 6% after announcing its first share buyback in more than a decade after solid third-quarter earnings. Lufthansa jumped 6.8% on plans to cut costs at some of its units to revive profit.
(Bloomberg) -- Lyft Inc. held talks with London’s main transport regulator about making an entrée into the European city through its bike-share program this summer -- a move that, had it happened, would have marked a significant departure for the ride-hailing company that has long focused only on the U.S. and Canada.In June, Lyft approached Transport for London about allowing its users access to the city’s bike-share system, called Santander Cycles. The talks fizzled after TfL ruled out a potential tie-up, according to information obtained in a Freedom of Information request by Bloomberg. TfL credited the success of its own app as a reason not to seek third-party partnerships.Although it didn’t come to fruition, the effort by Lyft sheds light on a potential push into international cities by the San Francisco-based company, which has lost more than 40% in the public markets since its initial public offering in March.“While we currently have no plans to launch rideshare services in London, we regularly meet with cities around the world to discuss urban transportation,” a spokeswoman for Lyft wrote in an email.Any entry into Londonwould pit Lyft against its major rival Uber Technologies Inc., which has long operated in the city and is currently working to improve its rocky relationship with TfL. The regulator in September granted Uber a two-month extension to operate in London.“We haven’t rushed to do international beyond Canada in a big way, and those are all very thoughtful decisions,” said John Zimmer, co-founder and president of Lyft, at a conference in September. “We’re setting the stage to be able to have to more easily go to additional markets. We have not made a final decision on when and how we will do that.”Lyft has kept up regular contact with TfL since 2016. Most recently its executives -- including Julia Haywood, a vice president -- met Michael Hurwitz, director of transport innovation at TfL, and Gareth Powell, managing director of surface transport, in July.The meeting covered the “status of the transport market in London and an update on the range of Lyft’s business activities, from ride-hailing to bike-rental,” according to TfL. Lyft representatives also held regular meetings with TfL counterparts to discuss data-sharing agreements and the implementation of payments software, the information request revealed.“We have considered the possibility of enabling people to hire bikes directly from third party apps,” Danny Price, TfL’s general manager of sponsored services, wrote in an email to Bloomberg. “But we have ruled this out at this time due to the popularity of hires made by contactless payment and our own app.”Lyft acquired an existing relationship with TfL via its takeover of bike-sharing company Motivate in mid-2018. Motivate owns 8D Technologies, which provides point-of-sale products for bike-share programs, including TfL’s Santander Cycles. Over the past year, Lyft has increased user access to shared bikes and scooters. Via the acquisition of Motivate, it acquired New York’s Citi Bike system, which is now available via its app.Lyft has also been building its presence in Europe with a new location and acquisitions. Early last year, the company opened its first European office in Munich, home to companies like BMW AG and Siemens AG. In October of last year, the company bought Blue Vision Labs, a London-based augmented reality startup.To contact the reporter on this story: Giles Turner in London at email@example.comTo contact the editors responsible for this story: Mark Milian at firstname.lastname@example.org, Anne VanderMey, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Siemens sounded a cautious note about the global economy over the next 12 months after booming industrial software sales helped the German engineering company beat forecasts during its fourth quarter. "The weakening of the global economy accelerated considerably fiscal 2019," CEO Joe Kaeser told reporters, adding Siemens nonetheless achieved its fiscal guidance. Global readings of manufacturing business surveys in October showed the aggregate ticked up for the third month to show an expansion in factory activity, easing some concerns about the world economy.
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is...
(Bloomberg) -- SAP SE is sticking to its new plan of keeping the company youthful, and top management isn’t being spared.The storied German software giant, Europe’s biggest tech company by market value, has spent the past few years attempting to reinvent itself. It’s working to adapt its corporate software, used by almost all of the world’s 100 most valuable brands, to the web and is taking on younger rivals in cloud-based computing.There’s also been an exodus of company veterans, which as of 12:44 a.m. Friday in Walldorf, included CEO Bill McDermott.Analysts have called the late-night news a surprise; McDermott’s contract doesn’t run out until 2021. He also unveiled a major restructuring plan in April and was expected to brief investors on the company’s strategy next month.But, as he said on a conference call after the announcement, “Ten years is a long time to be CEO.”McDermott, 58, had been with the company since 2002 when he joined as head of its North American business. At the time, he was that unit’s fourth head in three years as SAP struggled to compete with rivals like Oracle Corp., and grappled with a drop in sales of software licenses. Problems with its products were blamed for delayed shipments of Whirlpool Corp.’s appliances and even Hershey’s Halloween chocolates.In the role, he recruited a new management team, changed the way the sales department targeted customers, and ultimately boosted sales growth. When CEO Leo Apotheker unexpectedly resigned in 2010, McDermott and product-development head Jim Snabe were picked to replace him as co-CEOs. Snabe -- currently chairman of Siemens AG -- stepped down and took a spot on the board in 2014, and McDermott became sole head of the company.With nearly 100,000 employees and a sprawling business that generated about $27 billion in revenue last year, driving change has sometimes been controversial. Since 2011, McDermott spent $26 billion on six major cloud acquisitions, and was the main advocate for the $8 billion acquisition of Qualtrics International Inc., the company’s largest-ever deal.Analysts criticized the purchase as too expensive. In November, Qualtrics said it expected revenue for 2018 to exceed $400 million, a figure that wouldn’t move the needle much for SAP. McDermott defended the deal, believing that combining SAP’s sales force and a trove of operational data with Qualtrics’s customer experience feedback would accelerate growth.More recently, the company attracted the interest of activists at Elliott Management Corp., which revealed its 1.2 billion-euro ($1.3 billion) stake when SAP announced a change in strategy in April. SAP had been vague at the time, saying it planned “new initiatives to accelerate operational excellence and value creation” with a focus on “tuck-in” acquisitions.SAP underwent a management shakeup in the weeks preceding the April announcement. The president of its cloud business, 27-year SAP veteran Robert Enslin, had announced his departure earlier that month. It was later revealed he’d left for Google. A day earlier, Chief Technology Officer Bjoern Goerke, another cloud expert based in the U.S., penned a blog post saying he was leaving the company he joined as a student in 1988. Board member Bernd Leukert, a seasoned IT executive, left SAP in February.Personally, McDermott also had to weather a near-fatal accident in 2015 that cost him an eye when he fell down some stairs while carrying a water glass and nearly bled to death.His replacements are a mix of old and new guard at SAP. Christian Klein, 39, spent the past 20 years at SAP, after joining as a student in 1999. Jennifer Morgan, 48, arrived in 2004 and was the first American woman on the company’s executive board. Morgan has been seen as McDermott’s protege, rising relatively quickly through the ranks, and most recently served as the president of the all-important cloud group.Together, Klein and Morgan will have to find a way to compete with younger companies like Salesforce.com Inc. and Workday Inc. while encumbered by a traditional enterprise software business.Cloud is the company’s clear growth engine, with revenue increasing about 32% last year to about 5 billion euros. Sales from its largest business, which helps clients set up and implement SAP’s software, grew less than 1% in 2019.McDermott’s resignation was announced alongside better-than-expected preliminary third-quarter earnings results. New bookings for the company’s cloud products, a key metric that indicates future sales, grew 33% on a constant-currency business. That was more than double the pace set in the second quarter, when disappointed investors sent shares down as much as 10%.“While it is a shock to see Mr. McDermott stepping down, he is clearly handing over the reins of the business from a position of strength and we are encouraged to see that his replacements are long-term members of the SAP executive team,” said Thomas Fitzgerald, fund manager at SAP shareholder Edentree Investment Management, in a note on Friday.\--With assistance from Stefan Nicola.To contact the reporters on this story: Amy Thomson in London at email@example.com;Kit Rees in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Giles Turner at email@example.com, Nate LanxonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The battle for control of Osram Licht AG is set to enter a new round after Austria’s AMS AG vowed to keep fighting after a sweetened 4 billion euro ($4.4 billion) offer failed.AMS, a supplier to Apple Inc., will seek a regulator nod to raise its 19.99% stake in Osram. As the biggest shareholder in the German lighting maker, AMS’s approval has become key for any would-be rival bidder. Osram has said private equity investors Bain Capital and Advent International are inspecting its books with a plan to make an offer.“We doubt private equity will launch a superior bid given AMS has built up a 19.99% stake in the meantime,” Commerzbank said in a note. “While we cannot rule out that AMS might make another push, timing is yet unclear, so we attach a greater likelihood to a potential cooperation only.”German takeover law doesn’t allow a new bid within one year unless the target gives its consent, as well as stipulating that an offer needs to be made if an investor crosses a 30% ownership threshold. AMS’s pursuit took a setback Friday, when it announced its offer failed to attract enough support from shareholders. Osram investors had tendered only 51.6% of their shares, short of a 62.5% threshold.Osram fell as much as 4.5% to 39 euros, the most in two months, while shares of AMS declined as much as 5.8%.AMS’s failed bid extends a period of protracted uncertainty for Osram, which emerged as a takeover target last year after warning trade friction and a cooling of the car industry had clouded the outlook for 2019. The former division of Siemens AG gets about half of its revenue from the automotive sector. Subsequent profit warnings further eroded investor confidence, sending shares tumbling until the takeover battle took hold.Osram confirmed talks with Bain and Carlyle, which was later replaced by Advent, in February after they were first reported by Bloomberg News. A bidding war broke out in July when AMS lobbed a higher offer. The Austrian company has drawn criticism from Osram unions and employee representatives on the board, as well as management due to concerns about promised synergies as well as the deal’s financing.Following the months-long takeover battle against private equity suitors, AMS said the combination remains compelling and pledged to continue to “explore strategic options” for a takeover. Bain and Advent are inspecting Osram’s books “with a view to submitting an offer,” Osram said in a separate statement.AMS, a supplier of facial recognition technology for Apple’s iPhone, has said it would invest in the company’s Regensburg, Germany site that makes high-tech chip components, but would sell the digital division that makes lighting controls, stage and theater lights.Century-old Osram, based in Munich, started out making light bulbs, pivoting in recent years under Chief Executive Officer Olaf Berlien to products like iris scanners and infrared emitters. The refocus was contentious, leading to a boardroom clash over strategy and a public spat with Siemens before the German engineering giant sold down its stake.To contact the reporter on this story: Oliver Sachgau in Munich at firstname.lastname@example.orgTo contact the editors responsible for this story: Tara Patel at email@example.com, Elisabeth Behrmann, Jennifer RyanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Siemens Aktiengesellschaft (ETR:SIE) saw a double-digit share price rise of over 10% in the past couple of months on...