German retailer group REWE to put electronics stores on the block

German retailing major REWE Group announced plans to offload its consumer electronics stores, which operate as part of the ProMarkt chain.

REWE chairman Frank Wiemer said that the move was prompted by constantly growing competition in the local market, further exacerbated by the steady consumer shift to online shopping. REWE does not see any prospects for medium-term profitability at ProMarkt.

The chain’s share of the German market stands at a mere 1.4%, which excludes restructuring as an alternative, Wiemer added.

When approached by Reuters for additional information, a REWE spokesman declined to say whether any parties had expressed interest in ProMarkt. He only disclosed that the company was open to selling the stores as a bundle or individually.

Germany’s Siemens hires Rothschild to divest security products unit

German engineering group Siemens AG (ETR:SIE) intends to divest its Sweden-based security products business and has appointed investment bank Rothschild to advise it on the process, Bloomberg reported today citing three insiders.

The move is part of the company’s plan to sell slower-growth operations that are less synergistic with its core activities in a move to bolster its profits.

The target, which employs some 350 people, offers security cameras and access card readers, among other products. Last week, Roland Busch, head of the infrastructure and cities division, said that as a stand-alone entity, the security products business did not comply with the company’s focus on security solutions that are part of its building automation solution and therefore was not viable.

Siemens, whose shareholders already backed the planned spin-off of lighting maker OSRAM Licht AG, also intends to shed its airport luggage systems, mail automation and water technology businesses. Siemens spokesman Philipp Encz refused to comment on other possible sales of units. A spokesman for Rothschild also did not wish to comment.

Advent, Kreke family to squeeze out remaining Douglas shareholders

Advent International Corp and the Kreke family said today that they had so far accumulated a 95.33% stake in German retailer Douglas Holding AG (ETR:DOU).

Together with the 12.73% already owned by the Douglas founding family Kreke, Beauty Holding Three AG, a firm controlled by funds advised by the private equity firm, secured an ownership level of 93.09% in Douglas by 4 December. Another 2.24% stake was bought outside the EUR38.00 (USD50.34) tender bid, whose additional acceptance period is set to expire on 21 December.

Having secured over 95% of the German firm, Beauty Holding can now proceed with a squeeze-out for the rest of the Douglas stock, with the procedure to be carried out until 20 March 2013 at the same price per share, the pair added.

The EUR1.5bn transaction, which was launched in October, will see the Kreke family holding an indirect stake of 20% in Beauty Holding, while Advent funds will own the rest.

German Bosch unveils €1.1bn disposal of Denso stake

German technology supplier Robert Bosch GmbH said on Thursday it had recently disposed of its remaining 5% stake in Japanese car parts maker Denso Corp (TYO:6902) for around EUR1.1bn (USD1.4bn).

Robert Bosch Investment Nederland BV had sold all of its non-strategic shareholding in Denso which comprised roughly 46m units, Bosch said without disclosing the name of the buyer. The group intends to use the cash funds for capital expenditure in fields with promising future, as well as to finance takeovers.

The two parties have been collaborating since 1953 when they sealed their first license contract regarding the production of electric automotive equipment. The German group, which has been a shareholder in Denso since the mid 1950s, had divested a part of its original investment in 2009. The firms also have two joint ventures.

More specifically, they have stakes in US-based vehicle fuel pumps producer Associated Fuel Pump Systems Corp (AFCO) and in Advanced Driver Information Technology Corp (ADIT) which develops platforms for vehicle infotainment systems in Japan and Germany.

Bosch noted that the stake sale will not affect the long-standing partnership between the two. They will still collaborate within the framework of existing alliances and will continue to examine opportunities for future ones.

Germany looks into planned merger of European defence giants EADS and BAE

The German government is currently looking into the details of the planned tie-up of European aerospace and defence group EADS NV (EPA:EAD) and British defence contractor BAE Systems Plc (LON:BA) and will give an answer within the deadline, Chancellor Angela Merkel told a news conference on Monday.

The two companies announced last week negotiations to combine their operations creating a world class international aerospace, defence and security group which would benefit from cost savings from procurement and sourcing efficiencies available to the enlarged group and ensuring significant new business opportunities, they have said.

Under the terms being discussed, EADS’ current shareholders would own 60% in the combined group, while the shareholders of BAE Systems would hold the other 40%, the companies said. The resulting group would have substantial manufacturing and technology excellence centres in France, Germany, Spain, the UK and the USA.

EADS and BAE Systems have started discussions with various governments about the effects of a potential merger and plan to issue special shares to each of the French, German and UK governments to replace the UK government’s stake in BAE Systems and the stakeholder concert party arrangements in EADS, the have said.

Merkel said the German government is evaluating the proposal and is talking with others on the planned deal.

According to industry sources cited by the Financial Times Deutschland earlier, EADS would be willing to give Germany a veto right and job guarantees in order to secure its approval for the deal.

The two companies have until October 10 to announce a deal, with BAE Systems saying it would file for an extension if talks continued beyond that date.

Germany’s ThyssenKrupp in talks to sell blanks unit to China’s Wuhan Iron

German steel group ThyssenKrupp AG (ETR:TKA) is nearing an agreement on the sale of its Tailored Blanks business to Chinese iron and steel products maker Wuhan Iron and Steel Co Ltd (SHA:600005), according to sources cited by the Financial Times Deutschland.

ThyssenKrupp, which is undergoing a restructuring aimed at reducing debt, said on 10 August it was in advanced negotiations to dispose of the unit. The group’s chief financial officer Guido Kerkhoff told analysts then that it would not take long until an agreement was reached.

ThyssenKrupp Tailored Blanks makes laser-welded blanks for the car sector. Based in Germany, the division has a global network of 13 plants in seven countries.

With a 41% share of the global sector market, ThyssenKrupp Tailored Blanks generates annual revenues of EUR700m (USD878m) and has 900 employees, Reuters said.

ThyssenKrupp plans to sell non-core operations with combined revenues of EUR10bn.
The group has recently signed an agreement to dispose of ThyssenKrupp Steel Europe AG’s Construction Group to Irish Kingspan Group plc (LON:KGP) as part of efforts to optimise its portfolio, it has said.

In line with the same efforts, the steel giant is also looking into the possibility of selling Berco, its Italian supplier of undercarriages for construction equipment, it said.

Its strategic development programme advanced in the third quarter, with 90% of its planned disposals being completed or signed by the end of that period, ThyssenKrupp said.

The company is present in some 80 countries globally, employing a workforce of 170,000 worldwide.

Euro crisis threatens the existence of the EU — Italian PM

Italian prime minister Mario Monti has warned that the sovereign debt crisis in Europe is not only threatening the existence of the eurozone, but also the European Union itself.

Monti told German news magazine der Spiegel in an interview, published on Sunday, that Europe is facing a “psychological break-up”.

Strict conditions of budget cuts attached to bailout funds to struggling eurozone countries, such as Greece, have angered their citizens and Germany especially has been painted in a negative light.

Last week, European Central Bank chief Mario Draghi disappointed as he failed to deliver after promising to protect the euro at all costs. Politicians and investors had been expecting decisive measures, following Draghi’s pledge to do “whatever it takes to preserve the euro”.

But the bank left interest rates unchanged and postponed planned bond purchases of debt issued by the most troubled eurozone countries, such as Italy, until September.

Many economists believe the ECB’s decision is strongly influenced by Germany’s Bundesbank, which strongly opposes the buying of bonds. The German central bank also opposes any moves to give a banking license to the European permanent rescue fund, an idea which is supported by Monti.

 

 

Ratings agency Moody’s warns of negative outlook for Germany

Credit ratings agency Moody’s on Tuesday warned that the outlook for Germany’s AAA credit rating is negative, which is said to be the first step towards a possible downgrade. Credit ratings for the Netherlands and Luxembourg were also put on negative outlooks by the agency.

According to the credit ratings agency, the eurozone’s top-rated economies were at risk from wider eurozone troubles and a possible Greek exit from the euro. Moody’s added that there was an increased chance that Greece could leave the eurozone which could “set off a chain of financial sector shocks.” Financial sector shocks are only expected to be able to be contained by policymakers at a very high cost, according to the agency.

The BBC said that a negative outlook posting from Moody’s, which is one of a number of agencies measuring the creditworthiness of borrowers, reflects a higher risk that the actual rating will be cut at some point within the next two years.

Moody’s warned that Germany along with other highly-rated countries may have to increase levels of support for countries such as Spain and Italy, who have not yet asked for a Greek-style bailout but are said to be struggling with high levels of debt.

According to the German Finance Ministry the country will remain strong, and it added that Moody’s was focusing on short-term risks. “By means of its solid economic and financial policy, Germany will retain its ‘safe haven’ status and continue to play its role as the anchor in the euro zone responsibly,” the ministry said.

Other agencies, including Standard & Poor’s and Fitch, currently have Germany on the AAA top rating with a stable outlook, which is said to suggest that they do not currently foresee a weakening of its financial position, although all agencies regularly review their rankings.

AIG’s German arm raises offer for property investor AIRE

AIG Century GmbH & Co KGaA, part of US insurance major American International Group Inc (NYSE:AIG), said on Monday it had hiked its voluntary tender offer for German real estate investor AIRE GmbH & Co KGaA (FRA:ARE) to EUR19.75 (USD23.9) a share.

When submitting its bid on 30 April, the suitor proposed to take full control of the Frankfurt am Main-based company at a price of EUR17 per share. In May, AIG Century increased the offer to EUR18.25 a share.

The additional acceptance period on the offer will close on 30 July 2012.

The revised price is at a 46.8% premium on the company’s closing on 27 April, the last trading day before AIG Century announced its intention to launch the buyout offer, and 102.8% above its estimated volume weighted average price for the six months to 27 April.

AIG Century held 7.56% in AIRE before announcing plans to present a bid for the real estate investor.

The increase in the bidding price follows an off-market acquisition at a price of EUR19.75 a share and applies to all AIRE shares tendered to AIG Century during the offer process.

The buyer, which has so far built a stake of 93.05% in its target company, will make an additional payment of EUR1.50 to shareholders who have tendered their stock during the initial acceptance period. Shareholders who tender their stock during the extra acceptance period will be paid the increased price.

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German Linde to expand in the US with possible deal to acquire Lincare

German gases group Linde AG (ETR:LIN) is racing to buy US Lincare Holdings Inc (NASDAQ:LNCR), a provider of oxygen and other respiratory therapy services, for some USD3.4bn (EUR2.7bn), in a move that would substantially expand its pharmaceutical and medical gases business, according to informed sources cited by the the Financial Times Alphaville blog.

Linde is offering at least USD40.00 a share for Lincare and leads the bidding race which also includes French Air Liquide (EPA:AI) and an unnamed private equity firm, the people said.

A deal would see the German group expand its presence in the US after widening its reach across the sector in Belgium, Germany, France, Portugal and Spain with the acquisition earlier this year of Air Products and Chemicals Inc’s (NYSE:APD) homecare business in Europe. The Air Products deal gave Linde the second position in the homecare sector after Air Liquide.

A potential acquisition of Lincare would boost Linde’s healthcare operations which provides higher margins than its main industrial gases business while improving its position in the high-growth sector.

With a capitalisation of slightly over USD20bn, Linde is seen capable of ensuring financing a potential deal for Lincare, the report said.

Lincare provides homecare services to customers suffering from chronic obstructive pulmonary disease (COPD). It served over 800,000 customers in 48 US states and Canda through 1,108 operating centres as of 31 December 2011.