Morning Briefing Global Edition

Nein to a Bailout for Deutsche Bank

Deutsche Bank shares fell to a new low this morning after a weekend report that Chancellor Angela Merkel gave a firm “no’’ to bailing out Germany’s embattled bank. Merkel said Berlin would not intervene on Deutsche’s behalf to whittle down a $14 billion fine that could come in from U.S. authorities. With federal elections coming up next year, she knows voters want to hear about tax breaks, not bailouts.

 

Air Berlin staff are in for turbulence after Süddeutsche Zeitung, citing insiders, reported that Germany’s second-largest airline could merge with Tui, a tour operator. The move could cost 1,000 jobs. An earlier report leaked Air Berlin’s plans to lease 40 aircraft to rival Eurowings, leaving it with only 70 planes. For Air Berlin, the new flight plan appears to be: Any port in a storm.

 

Takeover fever is keeping pace this week with German chemical giant Lanxess announcing plans to buy Philadelphia-based rival Chemtura for $2.7 billion. Lanxess is taking a cue from Bayer, its former corporate parent, to purchase its way into a bigger footprint in North America. Like Bayer, Lanxess will have to run the antitrust gauntlet and survive rising protectionism in the United States. If they need it, one Lanxess argument before Congress could be: We are buying American!

 

Such hurdles could seriously complicate even Bayer’s $66 billion mega-fusion with U.S. rival Monsanto. Given the size and product and market overlap of the companies, competition law experts are expecting the Bayer-Monsanto deal to face the toughest antitrust scrutiny of any deal ever. We weigh Bayer’s chances of winning antitrust approval in no less than 30 countries. If the markets are correct, they’re at best 50-50.

 

Angela Merkel was in Vienna over the weekend to seek new refugee deals with Egypt and other North African countries that mimic the European Union’s deal with Turkey. To no one’s surprise, the summit initially produced discord, not results. The Hungarian prime minister, a fierce critic of Merkel’s refugee policy, suggested building a “giant refugee city” in Libya to process claims. Sounds about as likely as opening a Syrian restaurant chain in Budapest.

 

As if Merkel didn’t have enough on her plate, her own finance minister, Wolfgang Schäuble, told business weekly WirtschaftsWoche that to survive the refugee crisis and stop the rise of the political far-right, the European Union needs to send migrants back to their Northern African countries of origin. Schäuble, who just turned 74, is increasingly telling it like it is to anyone who will listen.

 

Usually, people with visions get sent to a doctor. At Siemens, they may earn one a contract extension. CEO Joe Kaeser has a good chance to nail down another term before his existing contract expires in August 2018. But Kaeser’s “Vision 2020” for a modern, digital and agile company is increasingly becoming a one-man show, grumbled one board member. Sometimes visions can be disturbing.

 

Image of the Day

Paris No Car Day
People walk on the Champs-Élysées during “no car day” yesterday in Paris, where some sections of the capital city were blocked off to traffic. City Mayor Anne Hidalgo plans to extend the initiative to every first Sunday of the month year-round. Source: AP/CHRISTOPHE ENA
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