VIPsight - 1st Edition 2017
COMPANIES
Continental: Joint venture with Nexteer Automotive in Motion Control Systems announced
During a press conference at the North American International Auto Show, Nexteer Automotive and Continental announced their agreement to form a joint venture focused on the advancement of motion control systems and actuator components for automated driving. This joint venture will combine Nexteer’s advanced steering and driver assistance (ADAS) technologies with Continental’s portfolio of Automated Driving and advanced braking technologies.
Nexteer and Continental will hold an equal 50-50 percent ownership position in the joint venture. The joint venture will focus on research and development activities including rapid evaluation, design and prototyping. Pending regulatory approvals, it is expected that this project will be operational in the first quarter of 2017.
Welcome home, Deutsche Bank
Many people regard Volkswagen as the prime example to demonstrate the high cost of poor corporate governance. But, in fact, one might as well turn to Deutsche Bank with its many expensive strategic turns and twists in recent years. Some years ago, the Bank could easily absorb the costs of poor leadership. More recently, however, it looks like growing concerns about the solidity of the bank and its local presence in the market became the most important element in the bank`s decision making process.
On March 5th, 2017 the bank announced the next strategic refinement. While the intended capital increase and asset disposals strengthen the equity basis and make it easier to deal with the remaining so-called “legal issues” (namely, the results of inappropriate behavour), the “re-integration” of Postbank marks an important strategic milestone – a new focus on the home market. The decision may come a little late, and perhaps it was enhanced by potential valuation issues with the initially planned sale of Postbank. But it looks like the natural thing to do since investment banking windfall profits largely disappeared from the screens. So welcome back at home, Deutsche Bank.
Deutsche Post DHL Group: UK Mail acquisition completed
Following the UK Mails shareholders resolutions at the General Meeting and the Court Meeting on November 18, 2016, the acquisition of UK Mail by Deutsche Post DHL was granted unconditional clearance by the European Commission on December 16, 2016. The UK Mail`s Scheme of Arrangement effecting the acquisition was sanctioned by the High Court of Justice in England and Wales on December 29, 2016.
DHL Parcel expanded its cross-border network since 2014 to cover 18 European countries. With the acquisition of UK Mail´s operations, Deutsche Post DHL Group added the nationwide infrastructure, a motivated team and high quality service capabilities to the European parcel network of Deutsche Post DH, according to Jürgen Gerdes, Deutsche Post DHL Group Board Member Post – eCommerce – Parcel.
METRO GOUP: Release of further details of the Demerger
At the Capital Markets Day in Düsseldorf, METRO GROUP released further details of the planned demerger. The wholesale and food business will operate under the corporate brand METRO, while the consumer electronics division will operate under the brand CECONOMY.
The new METRO AG is positioned as internationally leading specialist in wholesale and food retail, and primarily comprises METRO Cash & Carry, in addition to delivery specialists and other companies. The second activity under the new roof is Real, a large-scale, full-range supplier (hypermarket) in the food retail sector in Germany. As a benchmark for the distribution of dividends, the future METRO AG confirmed a targeted range of 45 to 55% of the company´s earnings per share.
CECONOMY is the holding company of Media Saturn, the European number one in consumer electronics on the basis of its sales of €22B (fiscal year 2015/16). In the past two years, Media Saturn hat increased sales and improved profitability. In principle, the company intends to base its dividend payment on a payout ratio of 45 to 55% of the earnings per share.
While it is intended that the former METRO AG will continue to exist as future CECONOMY AG and will constitute the consumer electronics business, it is planned that the wholesale and food specialist will be spun off as an independent, stock-listed company and will operate under the established name of METRO. The separation will be proposed to shareholders at a 1:1 ratio.
The AGM of METRO AG will vote on this demerger on Feb. 6, 2017. The Management Board of the former METRO AG expects that both companies will meet the MDAX criteria.
BASF: BASF continues with its portfolio optimization with the sale of its industrial coatings business and the acquisition of Chemetall
BASF has completed the sale of its global industrial coatings businesses to AkzoNobel. The transaction includes technologies, patents and trademarks, as well as the transfer of dedicated production sites in Deeside, United Kingdom, and Vanderbijlpark, South Africa. As a result of this transaction, AkzoNobel will now operate the global coil, furniture foil and panel coatings, wind coatings and general industry businesses acquired from BASF, as well as the commercial transport business in EMEA. These businesses generated sales of approximately €300M in 2015.The remaining portfolio of the Coatings division consisting of the automotive OEM and automotive refinish coatings businesses, as well as the decorative paints business with the leading brand Suvinil® in Brazil, had sales of approximately €2.9B in 2015.
The Coatings business has been further strengthened with the acquisition of Albemarle`s global surface treatment business, Chemetall, this week. Through this acquisition, BASF’s Coatings division expands its portfolio to become a more complete solutions provider. Chemetall’s sales for the full calendar year of 2015 were $845M. To prepare for a seamless integration, BASF has established a Global Integration Management Team, which will ensure business continuity while maintaining a clear priority on meeting customer needs.
Allianz: Allianz and HypoVereinsbank conclude sales collaboration
HypoVereinsbank (part of UniCredit) announced that Allianz will be the new insurance partner as of January 1, 2018. The collaboration widens the product range offered to the bank`s customers to include life, property and health insurance solutions. Customers will have access to advisers from HypoVereinsbank and Allianz for holistic and needs-oriented consultation. The personal consultation will be complemented by online packages and services. Allianz is using the collaboration to further expand sales through banks as part of its growth initiative, while HypoVereinsbank expects a strengthening of its market position and significant revenue potential.
As of December 31, 2017, the new collaboration with Allianz will replace the previous partnership of UniCredit’s HypoVereinsbank with the Ergo Group. HypoVereinsbank customers’ contracts with Ergo will remain in force. As of January 1, 2018, customers can only enter into new insurance contracts with Allianz, if going through the bank. Details of the new collaboration will be communicated prior to the launch.
Covestro: Easier Access to U.S. Capital Market
Covestro initiated a Level 1 ADR program with the intention of easing access to its shares for global investors. Covestro`s ADRs have been trading on the U.S. OTC (Over-the-Counter) market since December 1, 2016, under the trading symbol COVTY. The program enables the company to make direct contacts with registered depositary receipt investors. Through the sponsored ADR-program, Covestro wants to broaden its shareholder base for the long term and simplify access to its shares. In addition, the program enables the company to offer its employees in the U.S. the opportunity to take part in the company`s share participation program, which is expected to be launched in 2017.
The financial services provider Bank of New York Mellon was chosen as the depositary bank for the sponsored ADR program.
Biotest: Altered Tax Assessments lead to decrease of claims against Biotest
Biotest received revised tax assessments for corporate tax, solidarity tax and trade tax for the years 2005 to 2008. The revisions related to Biotest´s Russian business. The new assessments result in a decrease in tax and interest expenses of €6.9M. The company announced that it accepts the new assessments. At the same time, Biotest informed that it is in advanced discussions with the investigative authorities as to the completion of the summary proceedings regarding a fine. The prosecutor has already applied for the fine at the responsible court. The resulting liability of €1.0M was already set aside as provision in the September 30, 2016 results. Also, the authorities discontinued the investigations against several defendants from Biotest, but continue the investigations against three of the company´s managers.
Grammer: Demand from minority shareholder to get influence on the board composition rejected
In a voting rights notification published by the investor Cascade International Investment GmbH, Cascade demands the right to exert influence on the composition of Grammer AG’s Executive Board and Supervisory Board. With one exception, Cascade intends to replace all existing shareholder representatives on the Supervisory Board. According to Grammer, the nominees of Cascade are nearly all present or former employees of the Prevent Group, which is controlled by the Hastor family, and in addition, Cascade intends to dismiss the Chief Executive Officer of Grammer AG.
Grammer said that, according to publicly available information, Cascade, who is a 10.001 percent shareholder in Grammer, is a wholly owned subsidiary of Eastern Horizon Group Netherlands, in which the two sons of the entrepreneur Nijaz Hastor, Kenan and Damir Hastor, jointly hold a majority interest. In addition, Kenan and Damir Hastor are currently also the sole shareholders of Halog GmbH & Co. KG, which holds a further 10.22 percent stake in Grammer.
Grammer AG’s Executive Board and Supervisory Board stated that they are unequivocally committed to the continuation of the “successful corporate strategy and independent corporate governance in the interests of all shareholders and stakeholders” and therefore rejected Cascade’s demands. In a side remark, Grammer also stressed that important customers are also observing the changes in the shareholder structure and holdings of the Hastor family in Grammer AG very closely.
Clearstream sees GSF volume shortfall
Clearstream’s global securities financing average outstanding volume fell by 14 percent in 2016. The clearinghouse recorded €515.9 billion in outstanding volume for the year, down from €598.6 billion in 2015. Clearstream also ended the year with its December global securities financing (GSF) volume missing compared to €542.1 billion 12 months before. Clearstream is on the cusp of finally going live on the Target2-Securities (T2S) platform as part of the initiative’s fourth phase of implementation on 6 February, which will include the large German market. Even when prospected there is no combined start with Euroclear who is behind schedule. As two of the largest EU clearinghouses to utilise the platform, it was deemed impractical to initiate both in the same phase. Clearstream alone is expected to bring about 40 percent of the overall volume to the settlement platform.
Buhlmann's Corner
Are we really looking for an endless, timeless supply of cheap stuff?
They say there are always two ways of looking at things, and the victory of Donald J. Trump in the US presidential election is no exception. He is the living proof that the political, economic and intellectual élite was swept away because they had completely lost touch with reality.
Basing government decisions on “alternative” facts is of course bound to give rise to doubts and misgivings. Despite the absence of constraints marking the actual boundaries beyond which lies meta-reality, these facts do raise hopes and expectancies which, whether we like it or not, are vested with a measure of democratic legitimacy. As Clemens Vedder so apply put it “while reality used to be taken at face value, it has now become the raw material to be skewed, shaped stretched and shrunk from which to prepare the big picture.”
“First Lady” has become a label with its own commercial value – nowadays estimated at 150 million US$. With the security of her position comes the presidential seal of approval “by appointment” and can be used for everything from cosmetics onwards or - perhaps backwards - for lingerie.
And here lies the crux of the issue. Do we want to keep on buying stuff on the cheap or do we upscale to “Made in Slovenia” with Melania. Are we like the judges on the west coast who cast their vote by a headcount or a show of hands, or do we delegate someone else to do it in our stead.
I get the feeling that we much prefer following the advice of A.I. as to how to manage our investments in stocks and shares or put our money to use in algorithmic-piloted funds. Perhaps even in a ETF where “real” shares – the ones that have a measure of consequence in our daily life – are listed away at the end after all the sections for derivatives.
How, or rather who should shoulder the burden of responsibility when own capital management is the point at issue insofar as it affects one’s business partners and environmental requirements, as well as playing an active part by voting at the AGM. That may be how we like it and we’re even relieved that other shoulders are taking the burden. Isn’t it just a pity, though, that we felt for these things until just yesterday or so it seems, while today we’re delegating the job to someone else about whom we know very little.
Trump is assuredly a crafty Someone Else. His supporters vote for him instinctively because he gets things done. They have little regard for what these things are or are not, what he is, and whose interests they serve. They set examples for the Wilders and the Le Pens and they turn the clock back. One of these days we will be remembered as the generation who asked the banks to fund newly legitimised, environmentally hostile initiatives such as oilsands and pipelines They will also thank the insurance companies for underwriting the projects. For now, we enthuse about investors – oil funds, collection points etc – whose vote is all in the wrong direction, and how Allianz Global Investors sell off their coal-based investments or allow them to expire, so consigning them into the hands of the Someone Else.
When are we going to tell pensioners what values comprise the nest-egg they rely on for survival in their later years, and what decisions we or Mr. Someone Else take in accordance with these values? When will we agree on the price to pay for democracy? You can’t download responsibility from the Internet, just as you can’t shrug it off. You can’t turn a blind eye, fool yourself it doesn’t exist or make believe your name is Winterkorn.
If the Supervisory Board of Deutsche Bank is made up of an élite that claims no compensation from those found guilty of multi-million euro felonies, it means that our own domestic élite has cheapened itself. Why on earth should money be spent on getting third-party assays. In a state of law you speak to the courts directly. If the law courts reject the claim, then the élite in Deutsche Bank under Breuer and Börsig failed in their duty because they signed the wrong contract, and no matter what the press says, those involved were not Jain or Fitsche because it all began after Ulrich Cartellieri.
Politics
Volkswagen: Settlement with private plaintiffs and U.S. Federal Trade Commission reached
Volkswagen AG and Volkswagen Group of America, Inc. have reached proposed agreements to resolve outstanding civil claims regarding approximately 78,999 affected 3.0L TDI V6 diesel engine vehicles in the United States. Two agreements have been submitted to the Court for approval concerning a class settlement with private plaintiffs on behalf of a nationwide class of current and former owners of 3.0L TDI vehicles, and a proposed Consent Order submitted by the U.S. Federal Trade Commission.
With the 2.0L TDI program already on the way, this settlement would cover the remaining “diesel affair”-vehicles and offer resolutions to the customers. The settlement includes a set of actions, including vehicles to be recalled and repaired, free of charge to the customer, in order to bring them into compliance with the emissions standards to which they were originally certified, and buy back or offer trade-in credits of equal value for other cars. The program will start as soon as the Court grants final approval to the settlement agreements. At the earliest, approval will occur in May 2017.
Volkswagen: Settlement with US authorities on the so-called “diesel matter” reached
Volkswagen AG confirmed that it has reached an agreement with the US Government Department in order to resolve criminal and federal environmental and other civil claims against the company relating to the so-called “diesel affair.” As part of the settlement, Volkswagen has agreed to pay penalties and fines totaling $4.3B, as well as implement a series of measures to strengthen its compliance and control systems, including the appointment of an independent monitor for a period of three years. The resolution comprises four settlements, including a plea agreement with the U.S. Department of Justice. The plea agreement is accompanied by a published Statement of Facts that lays out the findings and facts established as to the origins and evolution of the misconduct in the “diesel affair”.
Volkswagen also stressed that since the end of September 2015, the company has taken significant steps to address the “diesel affair” and to realign the group. The initiatives implemented include enhanced operational processes, and reporting and control systems to ensure responsibilities are clear; a more robust whistleblower system and new, stricter standards in its emission testing practices. Volkswagen has substantially elevated its commitment to working ethically and with integrity and is decentralizing how Volkswagen is managed by granting its brands and regions much more autonomy. According to the statement, these and other substantive actions across the group are part of a broader transformation of Volkswagen´s corporate culture in order to create a more entrepreneurial and international organization.
People
BASF: New Faces on the Board of Executive Directors of BASF
The Supervisory Board of BASF SE appointed Saori Dubourg (head of Health & Nutrition division) and Dr. Markus Kamieth (Head of Coating division) to the Board of Executive Directors, effective May 13, 2017.
Margret Suckale (60) will retire with the expiration of her contract following the annual shareholders’ meeting on May 12, 2017. At the same time, Dr. Harald Schwager (56) will leave BASF’s Board of Executive Directors in support of long-term succession planning. Schwager was appointed to the Board in 2008 and is currently responsible for the divisions Construction Chemicals; Crop Protection; Bioscience Research; and Region Europe. Suckale has been on the Board since 2011. She is Industrial Relations Director and responsible for the division’s engineering & maintenance; environmental protection, health & safety; European site & network management; and human resources.
GfK: Shares might become a sparsity
2016 was a demanding year for GfK´s shareholders. Following the release of a profit-warning in early August, the share price collapsed. A few days later the announcement that the CEO, Matthias Hartmann, will leave the company as of Dec. 31, 2016, due to different views regarding the long-term direction of the business between him and the majority shareholder, GfK Verein, followed. In addition, the chairman of the Supervisory Board, Arno Mahlert, resigned, effective Sept. 12, 2016, due to differences of opinions in the cooperation with the majority shareholder.
The combination of profit-warning and corporate governance issues is not really what shareholders like, and accordingly the share price got under pressure. However, in early December the company surprised the market with the announcement regarding a voluntary public tender offer for GfK via a holding company (Acceleratio Capital N.V.) controlled by funds advised by KKR.
The Management Board and the Supervisory Board of GfK welcomed the all-cash-offer at €43.50 per outstanding publicly traded share, which represents a 44% weighted premium on the three months volume weighted average share price prior to the announcement. The offer was published on Dec. 21, 2016, and runs until Feb. 10, 2017. The minimum acceptance condition is 18.54% of the equity of GfK, while GfK Verein will retain its 56.46% holding.
What looked like easy sledding at first glance became a severe setback in Germany with the computer entrepreneur Michael Dell joining the scene via his MSD Capital vehicle, acquiring a 6.45% holding in GfK. According to an article in the German financial paper Handelsblatt, Dell probably bought his shares close to the offer price. The same may be true for Primestone Capital, who raised its stake in GfK from 3.21% to 5.00%.
Capital News
Südzucker: Successful placement of AGRANA shares
Südzucker AG succesfully placed 500,000 AGRANA shares within the capital increase of AGRANA Beteiligungs-AG, Vienna at a price of € 100 per share. Gross sales proceeds for Südzucker amount to €50M, while AGRANA collected approximately €132M from the issue of 1.32 shares within the capital increase.
Südzucker and Zucker-Beteiligungsgesellschaft m.b.H. (Raiffeisen-Holding Niederösterreich-Wien, and others) did not participate in the AGRANA capital increase, resulting in a dilution of the joint holding company Z&S Zucker und Stärke Holding AG from 86,2 percent to 78.3 percent. Therefore, the AGRANA free load rose to 18.4 percent of the shares. Südzucker still owns 0.2M AGRANA shares for sale, and an additional holding of 1.5 percent in AGRANA. Südzucker is also entitled to exercise a majority of the voting rights in the holding company at any time, therefore enjoying a controlling influence over the subgroup
AGRANA.
LANXEES: Chemtura shareholders approve acquisition
LANXESS has taken a significant step forward in the planned acquisition of U.S. chemical company Chemtura. At a special meeting in Philadelphia (U.S.), Chemtura`s shareholders approved the merger with 99.88 percent of the votes cast. Under the terms of the merger agreement, Chemtura shareholders will receive $33.50 for each outstanding share in cash at closing of the transaction. Clearance from the U.S. antitrust authorities for the acquisition has already been received at the end of December 2016. LANXESS expects to close the transaction in mid-2017, after all remaining regulatory approvals have been received. With the largest acquisition in its history, LANXESS is building on its own additives portfolio and will become one of the world’s major actors in this growing market. Flame retardant and lubricant additives are the main pillars of Chemtura’s business and would complement the current LANXESS portfolio. After closing of the transaction, these two business activities will be integrated into LANXESS’s Rhein Chemie Additives business unit to form a new segment.
Deutsche Bank: Another legal issue on track
Deutsche Bank has reached settlements with the UK Financial Conduct Authority and the New York State Department of Financial Services. The settlements conclude investigations into the bank´s anti-money-laundering control function in its investment banking division, in relation to certain securities trades that occurred between 2011 and 2015, involving its Moscow, London and New York offices.
In the UK, Deutsche Bank agreed to pay civil monetary penalties of approximately £163M. The bank qualified for a 30 percent discount for agreeing to settle at an early stage of the investigation. In the US, Deutsche Bank entered into a Consent Order and agreed to pay civil monetary penalties of $425M and to engage an independent monitor for a term of up to two years. According to Deutsche Bank, the settlement amounts are already materially reflected in existing litigation reserves. The bank also stated that it is cooperating with other regulators and law enforcement authorities, which have their own ongoing investigations into these securities trades.
Deutsche Börse: Option to sell LCH.Clearnet SA to Euronext N.V. addresses antitrust concerns over the planned merger between Deutsche Börse and London Stock Exchange
On Sept. 26, 2016, Deutsche Börse AG announced that the London Stock Exchange Group plc and LCH.Clearnet Group Limited are exploring the sale of LCH.Clearnet SA in order to proactively address antitrust concerns raised by the European Commission. On Jan. 3, 2017, the London Stock Exchange and LCH confirmed that they have received an irrevocable all-cash-offer from Euronext to purchase LCH.Clearnet SA (the put option). Also, the terms and conditions on which any transaction would take place if the put option were exercised, including the all-cash consideration of €510M (subject to customary adjustments), have been agreed with Euronext.
A sale of LCH.Clearnet SA would be subject to review and approval by the European Commission in connection with the recommended merger of Deutsche Börse and the London Stock Exchange, the completion of LCH.Clearnet SA's works council consultation process, the approval by the shareholders meeting of Euronext and other customary conditions including relevant regulatory approvals. It would also be conditional on the successful closing of the Merger.
Deutsche Bank: Settlement in Principle with US-Department of Justice regarding residential mortgage-backed securities
Deutsche Bank has reached a settlement in principle with the US-Department of Justice regarding civil claims in connection with its issuance and underwriting of residential mortgage-backed securities between 2005 and 2007. The bank agreed to pay a civil monetary penalty of $3.1B and to provide $4.1B in consumer relief in the US. The settlement is subject to the negotiation of definitive documentation.
In connection with the resolution of this matter, Deutsche Bank expects to record pre-tax charges of approximately $1.17B in the financial results for the fourth quarter as a consequence of the civil monetary penalty. The financial consequences of the consumer relief, if any, are subject to the final terms of the settlement, and are not currently expected to have a material impact on the 2016 financial results.
Deutsche Telekom: Strato AG sold to United Internet AG
Deutsche Telekom has reached an agreement with United Internet AG on the sale of Strato AG. United Internet is to acquire Strato through a holding structure, in which the private equity firm Warburg Pincus* will also hold a stake. The consideration for the transfer of all Strato shares to United Internet amounts to approx. €600M, representing an Enterprise Value / EBITDA 2016e multiple factor of approx. 12.4x. The transaction is expected to close during the first half of 2017.
Deutsche Telekom acquired the hosting services provider Strato for €275M in 2009. The sale is in line with Deutsche Telekom's strategy of continuing to develop into the leading European telecommunications provider. A component of this strategy is to consider options for increasing the value of business areas that can no longer be adequately developed within the Deutsche Telekom Group, through partnerships or disposals.
Until-now, Strato has been the service provider for the hosting of MagentaCLOUD services within the Telekom Group. The planned future owner, United Internet, will continue to provide these services in the coming years. This will ensure that the data continues to be stored in Germany, which means that strict German legal requirements will be met, and that the services will be underpinned by Deutsche Telekom's data privacy and data security criteria.
Bayer: Key Milestone achieved - Monsanto Shareholders approve merger with subsidiary of Bayer
At a special shareholders meeting on Dec. 13, 2016, the Monsanto shareholders approved the planned merger of Monsanto with a wholly owned subsidiary of Bayer AG. Under the terms of the merger agreement, Monsanto shareowners will receive $128 per share in cash at the closing of the merger.
Based on a preliminary count of the shareowner vote, approximately 99 percent of all votes cast representing approximately 75 percent of all outstanding shares on November 7, 2016, the date of record for the special meeting, were in favor of the merger. Monsanto shareowners also approved the proposal to approve, on an advisory (non-binding) basis, certain compensation that may be paid or become payable to the Company's named executive officers in connection with the merger. The final voting results of all agenda items will be filed with the SEC in the company's Form 8-K and will also be available at www.monsanto.com/investors. The transaction is subject to customary closing conditions, including the receipt of required regulatory approvals. Bayer, with the support of Monsanto, has now submitted a number of filings, including the U.S. Hart-Scott-Rodino Act filing. Closing is expected by the end of 2017.
Braas Monier: Amended offer and business combination agreement with Standard Industries is supported by the Braas Board of Directors
On October 14, 2016, Marsella Holdings S.à.r.l. (a wholly-owned subsidiary of Standard Industries Inc.) published a voluntary public takeover offer in the form of a cash offer to the shareholders of Braas Monier Building Group S.A., offering €25.00 per Braas Monier-share. The terms of this initial offer received a frosty welcome, as the offer price looked too low.
On December 18, 2016, the parties announced an amended offer, which the Board of Directors of Braas Monier fully supports. The new terms result in an economic value of €28.50 per currently held share for shareholders, who tender their shares into the offer.
The agreement provides for an offer price per share of €25.27. However, due to an increase in the number of shares outstanding by incorporation of reserves, the number of outstanding shares will be increased by ten percent. The new shares will be allocated to shareholders at no additional costs to them at a ratio of one new share for every then shares currently held. Shareholders will be able to tender both, their currently held shares and new shares. Finally, the agreement provides that the Board will resolve to distribute an interim dividend of €0.64 per (currently held) share.
Linde: Linde and Praxair announce their intention to merge
On November 30, 2016, Linde AG announced that it has received a revised proposal for the U.S. based company Praxair, Inc. concerning a potential merger of equals. The Linde Executive Board reviewed the proposal and announced that it will resume talks with Praxair on Dec. 7, 2016. All members of the Supervisory Board supported resuming the talks. Also, Dr. Wolfgang Büchele offered the Supervisory Board of Linde AG to step down as a member and chairman of the Executive Board. The Supervisory Board accepted the offer and appointed Prof. Dr. Aldo Ernesto Belloni as a member and chairman of the Executive Board, effective as of Dec. 8, 2016.
(Munich and Danbury, Dec. 20, 2016) Linde AG and Praxair, Inc. announced that the companies intend to combine their businesses in a merger of equals under a new holding company through an all-stock transaction. The companies have signed a non-binding term sheet and expect to execute a definitive business combination agreement as soon as practicable. Based on 2015 reported results, the combination would create a company with pro forma revenues of approximately €28B, prior to any divestitures, and a current market value in excess of €60B. The transaction shall create considerable value, resulting in approximately €0.9B in annual synergies.
In the all-stock transaction, Linde shareholders would receive 1.540 shares in a new holding company for each Linde share and Praxair shareholders would receive one share in the new holding company, resulting in Linde and Praxair shareholders each owning approximately 50% of the new holding company. The combined company would be named Linde, retain the globally recognized brand and would be listed on both the New York Stock Exchange and the Frankfurt Stock Exchange.
HeidelbergCement: All obligations in the context of the Italcementi Acquisition fulfilled
With the sale of its Martinsburg (WestVirginia) cement plant and eight related terminals to an affiliate of Cementos Argos, HeidelbergCement fulfilled an obligation of the US Federal Trade Commission. Now, the company has fulfilled all obligations in the context of the Italcementi Acquisition. The purchase price is $660M on a cash and debt-free basis. Following the purchase of shares not tendered in the mandatory offer on October 12, 2016, HeidelbergCement is the sole owner of Italcementi.
Aareal Bank Group: Conclusion of material litigations with holders of profit-participation rights
Aareal Bank Group has concluded material litigations concerning former Corealcredit Bank, with a ruling in the Bank`s favor. Holders of profit participation rights issued by Corealcredit Bank had sued it in connection with a reduction of repayment claims under profit-participation certificates, for fiscal years 2005 through 2008. These risks had been fully provided for through provisions and collateral. The conclusion of the proceedings will result in a positive non-recurring effect of €28M in pre-tax consolidated profit in the fourth quarter of 2016. However, the positive effect on income will be mostly offset by a corresponding tax effect of a similar amount, so that after-tax earnings will show only a minor (positive) effect of approximately €1M.
ADLER Real Estate: Allegations of Acting in Concert – Ruling by the Austrian Takeover Commission refuted
On September 5, 2016 ADLER Real Estate AG announced that it had entered into a tender commitment agreement with Vonovia SE pursuant wo which ADLER irrevocably committed to accept Vonovia`s contemplated tender offer to shareholders of conwert Immobilien Invest SE, Vienna. In November 2016, ADLER confirmed that it will accept the tender offer by irrevocably tendering all of the 26,160,921 shares in conwert held through a wholly-owned subsidiary. The confirmation concerned conwert shares representing approximately 25.7% of the share capital of conwert.
On Dec. 1 2016, ADLER informed that it has taken note of the AUSTIAN Takeover Commission`s legally non-binding ruling concluding that ADLER and others to qualify as parties acting in concert, and that they subsequently failed to make a mandatory takeover offer. ADLER refuted the allegations.
On January 18, 2017 ADLER informed that it has received € 422 m in connection with the successful tender of its shares in conwert to Vonovia in the context of the voluntary takeover offer of Vonovia to the shareholders of conwert.
Nemetschek: Acquisition of Norwegian software provider dRofus compliments product range
The German software provider Nemetschek SE acquired the shares of the Norwegian company dRofus AS. dRofus offers planning, data management and Building Information Modeling (BIM) collaboration tools. The company provides comprehensive workflow support and access to building information throughout the building lifecycle including the handover to facility managers – all on a single and central cloud-based platform.
dRofus is a complementary tool to all Nemetschek solutions and can ease the acquisition of new customers for both sides. The regional focus of dRofus is on Europe, the U.S. and Australia. For the year 2016, dRofus anticipates revenues of approximately €4.5M with an EBITDA margin of around 25 percent. The purchase price for dRofus amounts to €24.5M (cash-/debt free) and will be financed through free liquidity and the use of credit lines.
Scout 24: Successful re-financing completed
Scout 24 AG capitalized on its positive performance in recent years via a re-financing. The operator of digital marketplaces in Europe has concluded a new syndicated loan with eleven European banks under the leadership of UniCredit Bank AG totaling up to €800M, and maturing in December 2021. The new facility is used to repay an existing syndicated loan with a residual debt of €680M in full.
The new credit agreement comprises a term loan of €600M and a revolving credit facility of €200M. The new facility has been concluded at considerably improved terms. The initial interest margin is at 1.7%, prior to refinancing, the margin was at 3.5%. This translates into interest savings of around €12M in the business year 2017. Also, it offers greater flexibility to the company. At the same time, the CFO pointed out, that Scout 24 will push ahead with debt reduction to reach a target leverage ratio of 2.5:1 as a precondition to start paying dividends.
PATRIZIA Immobilien: Direct access to private investors launched
PATRIZIA Immobilien AG launched an online platform to allow private investors to browse and purchase its private funds online. The portal with the name eDirektzeichnung was created with the partner eFonds Solutions AG. It allows customers to buy shares in Patrizia`s real estate funds directly via the internet.
Via the portal, investors now have 24 hours access to all the facilities needed to make investments. According to PATRIZIA full transparency with all relevant information is guaranteed by a certified process.
The initiative represents another step to become more independent from traditional distribution channels. Last year, PATRIZIA GrundInvest launched four real estate funds for private investors with an investment volume of €230M. The attraction of these seemingly complicated funds to private investors comes from the relatively high distribution, which was anticipated to amount to 4.5 and 5.0 percent before taxes at the time of issue. The launch of a fifth fund is scheduled for the first quarter 2017.