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Corporate Governance – portrayed in the individual cultural and legal framework, from the standpoint of equity capital.

VIPsight is a dynamic photo archive, sorted by nations and dates, by and for those interested in CG from all over the world.

VIPsight offers, every month:
transparent and independent current information / comments / facts and figures on corporate governance locally and internationally,

  • written by local CG experts,
  • selected and structured by the Club of Florence,
  • financed by its initiator VIP and other sponsors with a background of “Equity and Advisory” interests.

VIPsight International

Nissan’s governance report is a warning for all boards

Comment: The special committee’s investigation into governance issues highlighted by the Carlos Ghosn affair reveals a corporate culture that allowed the “concentration of authority” in the CEO and a board that felt unable to ask the necessary questions.

Until June 2018 when 2 Independent Outside Directors were newly appointed, the average duration of meetings of the Board of Directors was less than 20 minutes. Mr. Ghosn disliked having questions and/or opinions raised at meetings of the Board of Directors.   <more>



VIPsight - 3rd Quarter 2019 <click here>

VIPsight - News


31 July 2019

Daimler AG: Second Profit Warning in 2019

Following a profit warning in June, Daimler informed about a Group EBIT for the second quarter significantly below market expectations and made another adjustment to the earnings outlook on July 12th. According to this statement, the Group EBIT for the quarter amounted to minus 1.6 Billion Euro (Q2 2018: 2.6 billion Euro).

In addition to the facts already disclosed in the June release and adjustments to sales and earnings projections due to slower product ramp-ups and lower growth in automotive markets than expected, the following items have been identified as new major problem topics:

- New information leads to a revised risk assessment regarding provisions for an extended recall in connection with Takata airbags. Provisions had to be increased by around 1.0 billion Euro.

- The EBIT was further impacted by a reassessment in connection with ongoing governmental and court proceedings and measures relating to Mercedes-Benz Diesel vehicles, which leads to an increase in expected expenses by around 1.6 billion Euro.

- A decision by the Board of Management in the context of the product portfolio review and prioritization affected the earnings of the Mercedes-Benz Vans division by around 0.5 billion Euro.


Leoni AG: IPO or sale of Wire & Cable Solutions Division planned

Leoni AG is preparing a separation of its Wire & Cable Solutions Division through a stock market listing or sale, including the option of a partial sale. While no final decision has been taken as yet, the company underlined in a release that a separation would enable a focus on the development of the Wiring Systems Division.

The decision to prepare a separation of the Wire & Cable Solutions Division followed a review of the existing group structure with regard to the optimal future ownership structure of the divisions.

Leoni´s Board of Directors sees only very limited synergies between both divisions and intends to increase their operational independence. In this context, corporate support functions will be transferred from the holding company to the divisions.


Deutsche Bank AG: Strategic Transformation and Restructuring Initiated

In light of the ongoing operational underperformance, Deutsche Bank´s Management Board announced a series of measures to restructure the bank´s operations with the aim to improve long-term profitability and returns to shareholders.

Deutsche Bank will exit its Equities Sales & Trading business while retaining a focused equity capital markets operation. Also, the Fixed Income operations will be resized and the wind-down of the non-strategic portfolio shall be accelerated. In total, the bank expects to reduce risk-weighted assets allocated to these businesses by approximately 40%. These actions are designed to allow the bank to focus on and invests in its core businesses, which are Corporate Banking, Financing, Foreign Exchange, Origination & Advisory, Private Banking, and Asset Management.

Furthermore, a significant restructuring of businesses and infrastructure is planned, including a cost reduction program designed to reduce adjusted costs to 17 billion Euro in 2022 and targeting a cost-income ratio of 70% in that year.

Deutsche Bank expects to take approximately 3 billion Euro of aggregate charges in the second quarter 2019 to facilitate the restructuring, including a deferred tax asset write-down of approximately 2 billion Euro and impairments of approximately 0.9 billion Euro. Additional restructuring charges are expected in the second half of 2019, and subsequent years. In aggregate, the bank expects cumulative charges of 7.4 billion by the end of 2022.


OSRAM Licht AG: Will AMS emerge as a second Bidder?

On July 4th, 2019, OSRAM announced that the transaction offer for the public takeover presented by a bidding consortium composed of Bain Capital and The Carlyle Group for all the outstanding shares of OSRAM at the offer price of 35.00 Euro per share was considered to be attractive by the Managing Board and the Supervisory Board.

A few weeks later, the company received a non-binding preliminary expression of interest by AMS AG to engage in discussions about a public takeover of OSRAM by AMS. AMS values OSRAM at 38.50 Euro per share, subject to the outcome of detailed due diligence and success in securing the required financing commitments for the transaction. The Managing Board of OSRAM regarded the probability of this transaction materializing as rather low. Nonetheless, OSRAM informed that it will enable AMS to perform due diligence within strict compliance of anti-trust requirements to possibly remove the substantial uncertainties about the funding of the transaction intended by AMS.


METRO AG: Major Shareholders announce intention to conclude a pooling agreement

Meridian Foundation and Beisheim Group issued a joint press release, in which they inform about the intention to enter into negotiations regarding the conclusion of a pooling agreement, which would concern a combined holding in METRO AG of 20.55% of METRO´s ordinary shares. Furthermore, the release said that the partners intend to gradually expand their shareholdings in METRO in case appropriate buying opportunities should arise.

The main objective of the partners seems to be to consistently exercise the voting rights of the METRO shares held by them and to act unanimously vis-à-vis METRO AG and its other shareholders in material matters, with the aim to secure a positive development of METRO AG.

The initiative increases the pressure on EPGC to amend its take over bid and follows the recent rejection of this bid by METRO´s Management Board and Supervisory Board.


SAF Holland S.A.: Awaiting Voting Rights Notifications

In an effort to harmonize with the corresponding provisions of the German Securities Trading Act (Section 33 (1) WpHG), the Extraordinary General Meeting of SAF Holland decided on April 25th, 2019 by way of an amendment of the Company´s Articles of Association, that shareholders who reach, exceed or fall below the voting rights´ threshold of 3% are required to promptly file a voting rights notification with the company. According to the CFO of SAF Holland, Dr. Matthias Heiden, this amendment to the Articles increases shall increase capital market transparency and support investors in making their investment decision.

In a recent press statement, the company clarified that shareholders who currently hold between 3% and 5% of the Company´s voting rights and have not reported this fact to SAF Holland are also requested to notify the company promptly.


29 July 2019

Siemens AG: Portfolio Adjustment planned

As part of its measures to sharpen the focus of its portfolio, Siemens plans a carveout of the Gas and Power Operating Company as a separately managed company, as well as a spin-off of the new legal entity combined with a subsequent IPO in order to deconsolidate the new company, while retaining a significant influence. In conjunction with these measures, Siemens also announced the intention to transfer its holding in Siemens Gamesa Renewable Energy S.A. to the new company.

According to the announcement, the IPO is scheduled to be completed by September 2019.


Pfeiffer Vacuum Technology AG: Relationship Agreement with Busch Group concluded

Pfeiffer Vacuum concluded a relationship agreement for the strategic cooperation with the Busch Group, which owns more than 50% of the issued share capital of the company via its investment vehicle Pangea GmbH. Negotiations started already in November 2018 and covered the areas research and development, procurement, IT and services and sales. Along with the operational cooperation, the agreement also establishes uniform standards as regards compliance and risk management.

Pfeiffer Vacuum expects that the cooperation will have positive effects on earnings and facilitate annual medium-term synergies in a lower two-digit Euro million range.


Volkswagen AG: Negligent Breaches of Supervisory Duties result in a substantial Fine

Following penalties against AUDI and VW, the Stuttgart prosecutors imposed a fine of 535 Mio. Euro on Porsche AG. 531 Mio. Euro shall be paid to compensate for profits arising from the cheating in diesel emission tests and the sale of diesel cars that spewed excessive pollution levels, while the remaining 4 Mio. Euro represents the penalty.

Porsche confirmed the fine and said that the conclusion of the prosecutors´ proceedings come to an end with this decision. However, the fine will probably not hinder the prosecutors´ ongoing proceedings against individuals involved in the questionable practices.


thyssenkrupp AG: Fundamental strategic Realignment proposed

thyssenkrupp and Tata Steel decided that it is unlikely that the European Commission will approve the planned joint venture of their European steel activities. As a consequence, the executive board of thyssenkrupp reassessed the strategic options for the group and proposed to not go ahead with the planned split into two independent companies. Instead, the company shall fundamentally realign itself to significantly improve its operating performance. Planned actions include a value based and more flexible portfolio approach with greater freedom for the development of all businesses, a leaner holding structure and a stronger performance orientation. At the same time, the group shall strengthen its capital base in order to gain the necessary financial leeway for necessary restructuring measures and business development. A potential outcome of the strategic reorientation could be an IPO of the Elevator Technology entity.


First Sensor AG: Voluntary Public Takeover offer is on the Way

First Sensor announced the signing of a business combination agreement with TE Connectivity. Following the signing, TE Connectivity announced its decision to make a voluntary public tender offer with a cash consideration of 28.25 Euro per share, representing a premium of 14.6% to the closing price as of May 24th, 2019, which is the last trading day before First Sensor confirmed the negotiations with TE Connectivity.

The transaction, including the assumption of First Sensor's outstanding net debt and minority interest, is valued at approximately EUR307 million. The publication of the offer document, which will initiate the commencement of the acceptance period, is expected to take place in early July.

The offer shall not have a minimum acceptance threshold. It is, however, subject to the required antitrust and other regulatory clearances and other customary closing conditions. Shareholders holding approximately 67% of the outstanding shares of First Sensor have already irrevocably agreed to accept the offer. Both, the Executive Board and the Supervisory Board of First Sensor support the tender offer.


Aurubis AG: CEO released from his Duties, effective immediately, and Investment Project stopped

The Executive Board and the Supervisory Board of Aurubis passed a resolution to stop the internal investment project “Future Complex Metallurgy”. Furthermore, the Supervisory Board decided unanimously to release the CEO Jürgen Schachler from his duties, effective immediately.

The originally planned investment amount was supposed to be 320 million Euro. However, the basis engineering results indicated significantly higher investment costs. Thus, the project no longer looked as cost-effective as originally planned. The investment costs of the project that have been capitalized so far will consequently plan an additional strain of approximately 30 million Euro on the Q 3 2019 result.


Axel Springer SE: KKR intends to launch a Public Takeover Offer

Axel Springer SE entered into an investor agreement with a holding company controlled by funds advised by Kohlberg Kravis Roberts & Co. (KKR), as well as with holding companies controlled by Dr. h.c Friede Springer and by the CEO Dr. Mathias Döpfner. This agreement concerns the terms and conditions of a strategic investment of KKR in Axel Springer. In accordance with the agreement, KKR´s holding company announced that it intends to launch a public takeover offer to all shareholders of Axel Springer at an offer price of 63.- Euro per share in cash. The Executive Board and the Supervisory Board of Axel Springer welcome and support the offer, subject to the review of the offer document.

The offer represents a premium of 31.5% on the volume weighted average share price of Axel Springer shares over the period of the last three month preceding the announcement of the negotiations for an investment by KKR. In addition to other customary conditions, the offer shall be subject to a minimum acceptance rate of 20 % and obtaining of merger control clearance and other regulatory approvals.


Deutsche Bank AG: Suspicious Activities with Mr. Trump?

The New York Times reported that anti-money laundering specialists at Deutsche Bank recommended in 2016 and 2017 that multiple transactions involving legal entities controlled by Donald J. Trump and his son in law, Jared Kushner, be reported to a federal financial crimes watchdog.

According to the article, the transactions set off alerts in a computer system designed to detect illicit activity. Compliance staff members who then reviewed the transactions prepared so-called suspicious activity reports that they believed should be sent to a unit of the Treasury Department that polices financial crimes. However, executives at Deutsche Bank rejected the specialists´ recommendations and the reports were never filed with the government.

The red flags raised do not necessarily mean that the transactions were improper.


ADO Properties S.A.: Candidates for Senior Management Positions wanted (soon!)

ADO Properties S.A. informed about the extension of the appointment of the CFO Florian Goldgruber and the COO Eyal Horn on an interim basis until September 30th, 2019, while the company is undertaking a search for a new CFO and COO.

The CEO of ADO Properties, Rabin Savion, is expected to leave the company with the scheduled expiration of his contract on July 22nd, 2019. According to the announcement, the company is also in the process of searching for a new CEO.


Tele Columbus AG: Too many Candidates

While ADO Properties needs to cover its vacancies on the senior management level soon, Tele Columbus might have too many candidates for the upcoming elections to the Supervisory Board. Following the invitation to this year´s AGM on May 15th, 2019, the company received a counter motion to item 7 of the agenda (Elections to the Supervisory Board) by United Internet, submitting its own proposal for the election on May 31st.

United Internet, which is Tele Columbus single largest shareholder with a holding of close to 30% of the shares in issue, expresses its concerns at the current status of Tele Columbus, highlighting share price and earnings declines and fluctuations in the management team. The key message to Tele Columbus was summarized as follows: “We are convinced that the candidates we propose have the expertise and experience required in technology and business management to perform the Supervisory Board´s duties optimally and assist the Management Board as far as possible in meeting the challenges ahead.”

While the initial reply by Tele Columbus has been a clear rejection of the proposal via a press release made on the same day, the company later postponed the AGM from June 21st to August 29th, 2019. The new AGM agenda shall be published in due course.


Deutsche Lufthansa AG: 340 Million Euro extra for the Taxman

Lufthansa AG made a profit warning and adjusted its full-year outlook. The operating business is suffering from a deterioration in European markets, caused by market-wide overcapacities and aggressively growing low-cost competitors putting pressure on yields. Based on the expectation of low single-digit Group revenue growth, the Group´s adjusted EBIT margin is now forecasted to reach 5.5 to 6.5 percent, resulting in a Group adjusted EBIT amounting to between 2.0 and 2.4 billion Euro in 2019.

However, Lufthansa also announced that the company will make a provision for a tax risk in the amount of 340 million Euro due to a change in the case law established in prior years by the German Supreme Tax Court.


METRO AG: Substantial Impairment on the Hypermarket Business

METRO AG has concluded an agreement on exclusive negotiations regarding the sale of its hypermarket business and related business activities (“Real”) with a consortium led by redos. The agreement provides that Real shall be sold to redos, but METRO shall initially retain a 24.9 percent holding in the operative business of Real and has a put option that shall be exercisable at the earliest after three years. Based on the status of the negotiations in May 2019, METRO decided to impair the value of the hypermarket business in the amount of 385 million Euro in its interim accounts for the first half of 2019.

Following an in-depth due diligence, the signing of a sale agreement is expected later in 2019.


CTS EVENTIM & Co. KGaA: Caught in a Traffic Jam

The European Court of Justice decided that the planned German infrastructure charge – in combination with the relief from motor vehicle tax in Germany – constitutes an indirect discrimination on grounds of nationality and is in breach of the principles of the free movement of goods and of the freedom to provide services. On December 30th, 2018, a syndicate of CTS EVENTIM and Kapsch TrafficCom was commissioned with the collection of the infrastructure charge by the German Federal Ministry of Transport and Digital Infrastructure. In this context, CTS EVENTIM informed that it is now reviewing the reasons for the termination and its implications. According to the press release, the contracts concluded with the German Federal Government contains protective provisions intended to prevent pecuniary damages for the operating company and its shareholders which also may be applicable in case the infrastructure charge will not be implemented.


METRO AG: Management Board feels undervalued

EP Global Commerce VI GmbH plans to make a voluntary public takeover offer for all of METRO´s shares at a price of 16.- Euro per ordinary share and 13.80 Euro per preference share.

The Management Board of METRO stated in this context that it strongly believes that the offer prices substantially undervalue the company and do not reflect the value creation plan of METRO. The company is going through a phase of continuing actions to transform the wholesale and food specialist and position it for the changing market environment. Therefore, the Management Board advised shareholders not to take action prior to the reasoned statement with respect to the offer to be issued by the Management Board and the Supervisory Board.

According to the bidder, however, EP ensured already full support by METRO´s key shareholder Haniel and holds a call option from Ceconomy.