TheChek News Flow

*BNP Paribas Raised to Buy at Banco Sabadell, PT EU68

*Credit Agricole Raised to Reduce at AlphaValue

*Ferrari Raised to Buy at Citi, PT EU74

*Tesco Raised to Buy at Deutsche Bank, PT 240p

>>> Down

*Casino Guichard Cut to Hold at Deutsche Bank, PT EU54

*Gemalto Cut to Hold at HSBC, PT EU62

*Gemalto Cut to Neutral at JPMorgan, PT EU56

*Rallye Cut to Sell at Deutsche Bank, PT EU11

*Sainsbury Cut to Hold at Deutsche Bank, PT 300p

*Standard Chartered Cut to Hold at Berenberg, PT 725p

*Telefonica Deutschland Cut to Sell at Bankhaus Lampe, PT EU3.50

*Tullow Cut to Sector Perform at RBC, PT 275p

*Zurich Airport Cut to Reduce at Kepler Cheuvreux, PT CHF175

>>>Initiation

*Ascential Rated New Buy at Citi, PT 375p

*Castellum Reinstated Neutral at Goldman, PT SEK126

*Cranswick Rated New Buy at Berenberg, PT 2850p

*Genus Rated New Hold at Berenberg, PT 1800p

*Inmobiliaria Colonial Resumed Overweight at Morgan Stanley

*Luceco Rated New Buy at Berenberg, PT 235p

*Statoil Rated New Underperform at Macquarie

Nikkei +0.23% Hang Seng +0.01% CSI -0.10% Shanghai -0.35%

Eur$ 1.0794 CNY 6.8873 CNH 6.8699 JPY 111.34 GBP 1.2488 RUB$ 57.72 WTI$ 48. +0.77%

S&P +0.18% EuroStoxx +0.12% Dax +0.19% FTSE+0.02% SMI +0.23%

Macro :

- EU Officials Warn U.K. Might Walk Out of Brexit Talks Early

- Macron 26%, Le Pen 25% in 1st Round, Harris Poll Shows

- U.S. Individual Investor Bears Fall to 6-Week Low: AAII

Keep an eye on :

- AKZA NA : PPG CEO to Meet Press in Netherlands to Discuss Akzo Proposal

- AKZA NA : Billionaire Singer Reports Akzo Holdings of 3.25%: AFM Filing

- ATC NA : Altice Refinances Portion of Existing Debt, Cuts Interest Costs

- ARAMCO IPO : Working with Saudi Arabia to push ahead energy cooperation

- BALN VX : Baloise 2016 Net Up 4.4%; Raises Dividend; Starts Share Buyback

- BARC LN : U.K. FCA Said to Relaunch Probe Into Barclays’ Cash Call: FT

- BAS GY : FMC Up After Reuters Says BASF Could Revisit Interest in FMC

- BAS GY : Wendel’s Stahl Agrees to Buy BASF’s Leather Chemicals Business

- BFIT NA : Basic-Fit Full-Year Revenue Grows 28% to EU259M

- BVS LN : Reject 814p bid from Redrow & 886p from Galiford - after Rdrow numbers could see new attempt

- CO FP : Wal-Mart Steps Up Chilean Business, Despite a tough economy, the retailer is poised to expand. (WWD)

- CWC GY : Cewe Stiftung Sees FY Ebit EU45m To EU51m

- ENGI FP : French Utility Engie Starting Energy Marketing Team in Houston

- FUM1V FH : Fortum Targets ‘Sizeable’ M&A This Year, CEO Tells Reuters

- GIVN VX : Givaudan Says Fabbri to Leave Executive Committee as of June 30

- GSK LN : Glaxo, Regeneron, Biobank Plan Largest Gene-Sequencing Program

- GOOGL US : Google’s YouTube problem continues: Now AT&T, Verizon and Enterprise are pulling some of their ads

- HBH GY : Hornbach Holding FY2016/2017 Sales EU3.94b, Up 4.9%

- IBAB BB : Ion Beam Applications Sees 2017 Adj. Ebit Margin 11%-12%

- DEC FP : Le Parisien: Paris : JCDecaux mal parti pour conserver ses Vélib'

- LEON SW : Helvetia Isn’t Interested in Raiffeisen’s Leonteq Stake: HZ

- MC FP : LVMH, De Beers Partnership Splinters, The much-touted partnership has ended quietly in divorce. (WWD)

- NOVN VX : Novartis’s Alcon Gets FDA Approval For New Toric Lens

- NOVOB DC : Novo A/S Targets U.S. Firms to Expand in Life Sciences: Borsen --> GBT US ??

- ONTEX BB : Ontex Sells 7,486,110 New Shares at EU29.50/Share in Placement

- RBI AV : Helvetia Isn’t Interested in Raiffeisen’s Leonteq Stake: HZ

- RAA GY : Rational Sees 2017 Ebit Margin Closer to Lower End of L-T Range, Sees 2017 Ebit Margin Near Lower End of Range

- SAZ GY : Stada Shareholders Sent Management Protest Letters: Man. Magazin

- STL NO : Statoil Awarded 13 Leases in U.S. Gulf of Mexico

- UBER IPO : Uber Judge Won’t Let San Francisco Driver Suit Go to Trial Yet

- UTDI GY : United Internet FY Sales EU3.95b, Est. EU3.97b

- MF FP : Wendel Posts FY Net Loss, Will Resume Share Buyback Program

- MF FP : Wendel’s Stahl Agrees to Buy BASF’s Leather Chemicals Business

BMW taps Unreal Engine for a mixed reality vehicle development process

Elements including interior surface coverings, the size of windows, and different functions of the car can be modelled and demoed using VR, overlaid on top of the rapidly prototyped 3D-printed basic surfaces. This replaces previous practices which required either very expensive, built-to-purpose VR facilities, or actually prototyping entire parts with surface materials attached before you had any idea what they’d look like in practice. BMW points out that this can dramatically improve ergonomic design, letting experts see how cabin elements or other features might impede movement or visibility before they build a more expensive physical model.

Aside from costs and time saved by identifying issues prior to making prototypes, BMW also says its new facilities can help collaboration between designers and other staff across offices from around the world. It’s also less wasteful since it doesn’t require the development of multiple iterations of the same models to see how each change will affect the design.

Collaboration in enterprise settings has been one of the things VR proponents have pointed to as part of its great potential. It’s probably still early to call this aspect of both virtual and mixed reality a slam dunk, but the fact that successful automakers like BMW are apparently finding value in its use does bode well.

Formula E announced the nine manufacturers that will race electric cars in seasons five, six, and seven. You may think this is no big whoop, but it is. Here’s why the whoop is big: beginning in season five, each team will race one car per driver for the entire race — like every other racing series on the planet — rather than two.

Because battery technology lagged behind series founder Alejandro Agag’s ambition for all-electric racing, Formula E teams have fielded two drivers with two cars per driver, so four cars in the garage. In the middle of the race, usually after about an hour on the track, the driver would pull onto pit row and climb out of the first car and into an identical second car with a fresh battery. It’s kind of the equivalent of refueling.

The new single-car standard will cover seasons five, six, and seven, which begin in fall 2018. The nine manufacturers who have met this standard are:

* ABT Formel E

* BMW AG

* DS Automobiles

* Jaguar Land Rover

* Mahindra Racing

* NextEV NIO

* Penske Autosport

* Renault

* Venturi Automobiles

There are teams currently racing that are not represented on this list, including Faraday Future Dragon Racing and Techeetah. But other manufacturers are furthering their commitment to electric open-wheel racing, like Renault, Venturi, NextEV, and Mahindra. Jaguar jumped into the series for 2016-2017, while MS Amlin Andretti, which is also racing this season, seems to be dropping out before the new standards come into play. Mercedes-Benz had been planning to join the fray in season five, but its name is not on this list published by FIA, the series’ governing body.

Also in 2018, there will be a new Formula E car on the track; Spark Racing Technology will produce identical bodies for each team to cover in stickers and shiny paint as they see fit. The new battery that makes single-car racing possible will be supplied to the teams by McLaren Applied Technologies. And the Roborace series should be up and running by that time too. These elements added together could mean we’ll see a complete reboot of Formula E for season five.

The much-touted partnership has ended quietly in divorce.

LONDON — First the fanfare, then the fizzle. De Beers Group said Wednesday it had purchased its partner LVMH Moët Hennessy Louis Vuitton’s 50 percent stake in their much-touted jewelry joint venture De Beers Diamond Jewellers.

While observers would argue the investment was a minor one for the French luxury giant — and that it was high time for LVMH to dispose of its stake — the partnership clearly never worked.

Bruce Cleaver, chief executive officer of De Beers, said by having full ownership, De Beers will be able to grow its offer and achieve further integration of operations across the retail network, which includes 32 stores in key markets such as London, Paris and a new location in New York’s Madison Avenue.

The company has been expanding its business in China and, since 2015, showcasing designs from its high-jewelry collections during Paris’ Haute Couture week as an official member of the Fédération Française de la Couture du Prêt-à-Porter des Couturiers et des Créateurs de Mode.

“By fully integrating the De Beers Diamond Jewellers brand and store network, it will enable us to deliver an even more differentiated diamond offering, alongside our fast-growing diamond brand, Forevermark,” said Cleaver.

De Beers Diamond Jewellers operates as a stand-alone retail business, while Forevermark diamonds are carried by third-party retailers.

Following the announcement, François Delage, ceo of De Beers Diamond Jewellers, talked about “a shared heritage and strong brand link” with De Beers Group. “By being fully part of the group, we will benefit even more from the unique diamond culture, established since 1888.”

While the jewelry retail brand continues to expand, the partnership between the two corporate behemoths was almost always unlikely to be a long-lasting one despite the bold and optimistic projections made for the business when it launched. Sources familiar with both parties said the LVMH and De Beers boards never gelled, and were worlds away from one another culturally.

“On one hand, you had the rough-and-tumble miners who are used to calling the shots in their industry. On the other, you had LVMH, which is all about doing things in a luxury way. De Beers didn’t understand how to market a luxury jewelry brand. Strategies were difficult to execute. The decision should not come as a surprise,” said a source familiar with the venture.

De Beers and LVMH unveiled their partnership in January 2001, setting ambitious goals to turn the De Beers name into the world’s leading prestige jewelry brand.

At the time, the South African mining group was looking to fuel demand for its rough diamonds. It was also wrestling with antitrust issues because of its role as the largest supplier of rough diamonds, and hoping to move into new areas of the business with an experienced retail partner.

Meanwhile, luxury titan Bernard Arnault wanted to expand LVMH’s watch and jewelry division and grab a bigger share of the diamond jewelry market, which, at the time was worth an estimated $60 billion.

“It is our strategy to build one of the largest [jewelry] companies in the world in 10 years. But even a fraction of a percent of $60 billion is quite a lot of money,” said Arnault during a press conference unveiling the venture.

At the time, LVMH’s watch and jewelry portfolio included Tag Heuer, Ebel, Chaumet, Zenith and Fred. Since then, it has expanded to include Bulgari, a big-name jewelry brand that made De Beers Diamond Jewellers look like a sideline business.

The venture was equally owned by the partners with an initial investment of $400 million made over the first five years, split equally. Opening De Beers freestanding stores and introducing high-jewelry collections by the brand were among the first steps taken. Arnault was also focused on building the brand’s image in order to transform De Beers into a consumer name.

Iman, alongside models Erin O’ Connor and Amy Wesson, were the first faces of the brand, and featured in a campaign shot by Nick Knight in the summer of 2002. The Somalian-born model, who also inspired the inaugural collection, was chosen by the brand for representing different facets of a woman’s life, from mother to wife to businesswoman.

The relationship between Iman and De Beers sparked controversy and the two parted ways after the model’s two-year contract expired. Iman became a target of criticism by the group NGO Survival International for appearing in the ads. Survival claimed that De Beers’ mining was forcing the relocation of the indigenous Bushmen of Botswana.

The business early on saw a revolving door of designers and ceo’s as strategies seemed to shift repeatedly. De Beers’ first store on Piccadilly in London was massive — too large for a store selling only diamond jewelry — while it also opened a two-floor store on Fifth Avenue in Manhattan, right near Cartier.

Meanwhile, the venture continued to change its design aesthetic, one moment emphasizing cutting-edge styles, another large stones and then another focusing on engagement rings, the core market for diamonds.

On Wednesday, analysts gave a thumbs-up to LVMH’s decision to sell its stake, saying it was a long time coming.

“LVMH has finally pulled the plug on their joint venture with De Beers. This originated at a time when LVMH did not have any branded jewelry of their own,” said Luca Solca, managing director at Exane BNP Paribas. “The situation is very different today, as they own one of the megabrands in this space: Bulgari. It seems appropriate, therefore, to turn the page on this, and relegate it to the ‘experiments that didn’t work’ pile.”

Julian Easthope, a luxury goods analyst at Barclays Capital, said the De Beers venture only represented a fragment of LVMH’s business, so the deal is of little consequence. “It was a joint venture between the two [parties], so not fully consolidated in the LVMH accounts, and it was a tiny part of one of [LVMH’s] smaller divisions, their watch and jewelry division. Therefore it makes sense for LVMH to tidy up their portfolio,” said Easthope.

In its 2016 annual report, De Beers’ parent Anglo-American said De Beers has a global leadership position in diamonds, producing around a third of the world’s rough diamonds, by value. It said De Beers “seeks to stimulate consumer demand for diamonds through its Forevermark brand and De Beers Diamond Jewellers,” a retail joint venture with LVMH.

The sector's tough times have resulted in the sale of a string of brands, with many of the buyers from the Far East.

The sale of Corum to Citychamp Watch & Jewellery Group — formerly known as China Haidian — has been one of a handful of deals in recent years as even established Swiss watch brands have been snapped up by foreign, often Asian, buyers.

This story first appeared in the March 23, 2017 issue of WWD. See More.

In 2014, Citychamp spent 27 million pounds, $42.3 million at average exchange, for the Dreyfuss Group, best known as parent company of watchmaker Rotary. Boss Robert Dreyfus has since taken management responsibility for Eterna.

Last June saw the surprise sale of Geneva-based Frédérique Constant to Citizen of Japan. Owners Peter Stas and Aletta Bax, an entrepreneurial Dutch couple who created the brand from scratch, had overseen swift expansion — to the extent of commissioning a purpose-built factory in Geneva’s watchmaking heart of Plan-les-Ouates, putting their brand alongside powerhouses such as Rolex, Piaget and Patek Philippe.

What prompted the sale of the company, founded in 1988, remains unclear. Rapid expansion may have made the brand, whose very affordable timepieces were deliberately styled conservatively enough for Far Eastern tastes, vulnerable to the Asian, notably Hong Kong, downturn. Others have suggested the cause was estate planning by the founders.

Despite its relative youth, Frédérique Constant had pushed output to about 150,000 pieces a year and spawned subbrands Alpina and DeMonaco. Peter Stas even boasted the brand had become a true manufacture with its own in-house movements — though the overwhelming bulk came from external suppliers.

Frédérique Constant has by no means been Citizen’s sole Swiss foray. In 2012, the Japanese giant snapped up three smaller Swiss watch or component makers. They included Arnold & Son, a small watch brand, and, above all, Prothor Holding, parent company of, among others, La Joux-Perret, a highly respected movement maker.

Most recently, last August saw the sale of Glycine, a small brand founded in 1914, to Invicta, a U.S. manufacturer that had previously acquired TechnoMarine. Glycine’s owner DKSH, a Swiss trading house focused on Asia, had decided to exit watchmaking after mixed results.

But DKSH’s main watch asset — the much better known Maurice Lacroix brand — has still to find a buyer. Maurice Lacroix has struggled in the tough 1,000 to 5,000 Swiss franc, or $1,005 to $5,027, price bracket, which is dominated by giants such as TAG Heuer and Longines. While Asian — particularly Chinese — interest in Maurice Lacroix has been long mooted, a deal has failed to materialize, suggesting that even potential out-of-town buyers have become much more wary about picking up assets at a difficult time for the Swiss watch industry. Potential acquirers have reportedly demurred because of the price, while the brand now says it is focused on a turnaround to boost its appeal to buyers.