Germany must ready for turbulent times under Trump - foreign minister
Germany must brace itself for turbulent times under U.S. President Donald Trump, Foreign Minister Frank-Walter Steinmeier said on Sunday, adding that free trade and trans-Atlantic cooperation to fight extremism and terrorism were key for Berlin.
Steinmeier, who in August said Trump was a "Hassprediger" or "hate preacher", wrote in the mass-circulation Bild newspaper that some members of the new U.S. administration understand the importance of allies like Germany.
"I know, we must prepare ourselves for turbulent times, unpredictability and uncertainty," Steinmeier said. "But I am convinced that we will find in Washington attentive listeners, who know that even big countries need partners in this world."
Trump unsettled German leaders with remarks such as that Britain will not be the last country to leave the European Union and with threats to impose high tariffs on imports from China and Mexico.
Their response after he took office on Friday has been mixed.
Chancellor Angela Merkel, who attended the opening of a museum outside Berlin as Trump was being sworn in on Friday, has said she would seek compromises with Trump on issues like trade and military spending and that she would work on preserving the important relationship between Europe and the United States.
Vice Chancellor Sigmar Gabriel said on Friday Germany should prepare for a rough ride under the new U.S. president and that Europe would have to craft a new economic policy geared toward China should Trump pursue protectionism.
Trump has also criticised Merkel's decision in 2015 to throw open Germany's borders to asylum seekers, and has said he believes the NATO military alliance is obsolete.
German Defence Minister Ursula von der Leyen said in an interview with the Handelsblatt newspaper to be published on Monday: "NATO is not a (business) deal. You can't buy trust."
Under fire from Trump for not meeting NATO's goals of spending two percent of national output on defence, Germany said this week it would meet that goal and demanded that the new U.S. administration map out a consistent foreign policy.
Von der Leyen said that European countries should be ready to modernise the almost 70 years old military alliance and split its financing in a fairer manner.
France's Fillon seeks European defense boost with 'foreign operations' fund
While the NATO alliance was in his view not "obsolete" as U.S. President Donald Trump has said, Europe nonetheless needed to build up its own capacities, Fillon said in a interview with French daily Le Monde and German newspaper Frankfurter Allgemeine Zeitung.
"I am not calling for an integrated European defense capacity, but a European defense alliance," he said in the interview released on the eve of a trip to Berlin.
"We need to pool our means, build a European defense industry and set up a fund that pools and funds spending on foreign operations," he said, adding that defense spending should not be excluded from EU deficit rules.
Fillon, who is scheduled to meet German Chancellor Angela Merkel as well as her finance and defense ministers, is due to sketch out his vision for Europe during his German trip.
Polls put Fillon, a former prime minister under ex-president Nicolas Sarkozy, in the lead to win a May 7 run-off vote in France's presidential election, though his lead over far right leader Marin Le Pen and independent centrist Emmanuel Macron has been narrowing.
Fillon, who has in the past been praised by Russian President Vladimir Putin, said that improved European relations with Russia hinged on Moscow's respect for the February 2015 Minsk peace agreement on Ukraine, which could in turn open the door in the future to a "new economic partnership".
With Europe not a priority for the Trump administration, Fillon also renewed a call for the euro zone to shore up its institutions and make the euro an international reserve currency as a counterweight to the dollar.
The euro zone needed to jointly steer economic policy at the highest level with regular meetings of its leaders and a focus on aligning corporate tax policy, he said.
With a pro-business focus on cutting public spending and making French companies more competitive, Fillon is generally seen as an ally by fellow conservative Merkel.
Fillon sought to pre-empt fears he may let the French public budget deficit deteriorate while he reforms the economy by saying that he aimed to keep the deficit as close as possible to 3 percent of economic output next year.
His program had indicated that the deficit could be as wide as 4.5 percent in 2018.
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President Trump was sworn in today and gave a speech that promised more jobs for Americans, 4% growth, a boost to infrastructure spending, and putting 'America first' in energy and foreign policy. The stock markets received the speech cautiously, dropping modestly in the immediate aftermath of his inauguration remarks. Overall, the reflation trade stayed on track as US Treasuries sold off, although the dollar continued to lose some ground against major currencies. The 30-Year yield rose 17bps over the week to close today at 3.06%, while the dollar index was down 0.2% on the week. Over the four session period, the DJIA lost 0.3%, the S&P slipped 0.2%, and the Nasdaq fell 0.3%.
Macro :
- Ukraine’s Poroshenko May Meet Trump After Mid-Feb.: Ukrinform
- Algeria Going Beyond Agreed OPEC Oil-Supply Cuts: Boutarfa
Keep an eye on :
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Cerba Healthcare sold to Partners Group and PSP Investments
Deal values operator of clinical pathology laboratories at about €2bn
PAI Partners has agreed the sale of Cerba Healthcare, the laboratory testing company, to Partners Group and PSP Investments, one of Canada’s largest pension managers.
The deal is valued at about €2bn, according to one person familiar with the terms, and is subject to regulatory approvals.
Bought in 2010 from another private equity owner, IK Investment Partners, PAI stands to make more than twice its original investment, the person said.
The transaction follows PAI’s sale of Xella, the German-based building materials maker, to Lone Star, the buyout group, last month.
Founded in 1967 and with its headquarters in Paris, France, Cerba employs close to 4,300 people and generated about €630m in revenue last year. It is a leading operator of clinical pathology laboratories, which carry out processes such as blood tests, and is number one in its field in France, with strong market positions in Belgium and Luxembourg.
Kim Nguyen, a managing director at Partners Group, said: “Cerba is a resilient market leader in a highly attractive and fragmented sub-sector of the healthcare industry. The unique fully integrated business model means that Cerba is ideally positioned to further consolidate the French market and accelerate organic growth.”
Partners and PSP said that they will work with Cerba’s management team to support the “numerous growth opportunities” of the business. These include the continuation of the company’s M&A strategy within the French market and internationally, as well as the development of other business segments.
Barilla plans GBP 1.5bn move on Weetabix - reports
A takeover bid for Weetabix, the UK-based breakfast cereal company, is being prepared by the family run Italian pasta group Barilla, The Sunday Times reported. The report cited people close to Bright Food, the Chinese owner of Weetabix, who said the group’s plan to grow the brand in China has not been overly successful.
A number of credible suitors are believed to be circling Weetabix, which also counts Ready Brek, Weetos and Alpen among its brands, the item reported. Should cereal titans such as US-based Kellogg’s [NYSE:K] join the process and stoke up a bid war, analysts estimate Weetabix might fetch up to GBP 2bn (USD 2.5bn), the report said. However, The Sunday Telegraph cited bankers who believe Kellogg’s would not take part as it would run into competition issues.
Barilla is believed to be preparing a bid of GBP 1.5bn and is currently discussing the matter with London-based advisers, the Times reported. City sources cited in the Telegraph report were sceptical however that bidders would meet Bright Foods’ GBP 1.5bn asking price, based on Weetabix's current turnover and profits, which have dropped over the past three years.
Goldman Sachs has been engaged to sell Weetabix and has been told a trade buyer is preferable to a buyer from the private-equity sector, the item reported.
Baring Private Equity Asia, which acquired a minority interest in Weetabix just over a year ago, is thought likely to dispose of its stake during the upcoming sale process, the item reported.
The Sunday Telegraph reported that Cereal Partners Worldwide, a joint venture between General Mills [NYSE:GIS] and Nestle [VTX: NESN], has indicated it is interested in bidding for Weetabix. Drinks giant PepsiCo [NYSE:PEP] and Turkey-based food group Pladis are also believed to be involved, the report said.
The original report appeared in The Sunday Times, Business section, page 1; and The Sunday Telegraph, Business & Money section, page 1
New F1 owner Liberty Media to unveil boardroom shake-up
Liberty Media will unveil a shake-up of F1’s board once its takeover of the sport closes next week, Sky News learns.
The new owner of Formula One (F1) motor racing will unveil a boardroom shake-up next week that will include the departures of two of Europe's leading businessmen.
Sky News has learnt that Liberty Media Group has decided to part company with all of the existing independent directors on the board of F1's parent, with the exception of Peter Brabeck-Letmathe, its former chairman.
The decision means that Sir Martin Sorrell, the boss of WPP Group; the former Unilever chief financial officer Jean-Marc Huet; and Chong Seng Kwa, the former boss of Exxon Mobil in Asia, will sever ties with F1 when Liberty's takeover of the sport is completed.
Donald Mackenzie, who has overseen the most lucrative investment in CVC Capital Partners' history during its decade in control of F1, will remain as a director, along with Sean Mahoney, who has represented the estate of Lehman Brothers on F1's board for the last three years.
News of the wider board changes comes hours after it emerged that Bernie Ecclestone, F1's veteran chief executive, would cease to have day-to-day control of F1, bringing the chequered flag down on one of the most remarkable reigns in global sport.
Mr Ecclestone has been offered the position of honorary president, although it was unclear on Saturday whether he would accept it.
Two of Mr Ecclestone's loyal lieutenants, the chief financial officer Duncan Llowarch and Sacha Woodward-Hill, who oversees F1's legal affairs, have been asked to stay on.
The boardroom and management changes are being engineered by Liberty Media in a sign of the new owner's determination to press ahead with radical changes to the administration of F1.
Sean Bratches, a former ESPN executive, was revealed by Sky News last month to be the frontrunner for a top commercial job, while Ross Brawn, the former Ferrari team boss, has been lined up to take on a key role overseeing the sporting side of F1.
Under F1's new chairman, Chase Carey, Liberty Media is preparing an ambitious overhaul of the sport aimed at connecting it with a new fan-base more accustomed to using digital and social media than it is consuming traditional media channels.
Mr Carey also wants to turn Grands Prix into more compelling events, which each have a Super Bowl-type appeal to advertisers and sponsors.
The number of races which take place each year is also likely to increase.
F1's new shareholders are said to have been surprised at the comparatively undeveloped approach to exploiting its commercial rights compared to other global sports franchises.
Liberty Media Group also wants to bring in F1's teams as shareholders in the sport, announcing this week that it would use a $400m private offering of cash convertible senior notes as part of a deal to issue shares to the teams.
Mr Carey said: "Several of the teams have expressed interest in investing and we have already begun productive discussions to make the sport more competitive and even more exciting."
The new F1 supremo is in talks with F1's constructors about altering some of the details of the planned share sale, including reducing the period over which they must retain their stakes.
A deadline for the teams to place orders for the shares is being extended beyond this month owing to their unfamiliarity with this kind of investment decision.
A small number of teams, including Ferrari, already have rights to nominate one director to the Delta Topco board.
Eleven constructors competed in the 2016 World Championship, but there are now grave doubts about Manor Racing's ability to participate in this year's series after the company which operates the team recently collapsed into administration.
Talks are ongoing about a rescue deal for Manor.
The latest developments come after Liberty Media voted to approve the deal, with the motorsport governing body, the FIA, also giving its blessing this week.
A Liberty Media Group spokeswoman declined to comment.
Mediaset says has no interest in three-way shareholding partnership with Vivendi and Telecom Italia (translated)
Pier Silvio Berlusconi, the CEO of Mediaset [BIT:MS], has ruled out a shareholding partnership involving Vivendi [EPA:VIV] and Telecom Italia [BIT:TIT], Italian-language daily Il Sole 24 Ore reported.
The report cited Berlusconi as saying that Vivendi CEO Arnaud de Puyfontaine made the offer at a meeting just before Christmas 2016 but that it was turned down as Mediaset had no intention of taking its focus away from broadcasting.
The report also cited Berlusconi as saying that Mediaset would continue to pursue Vivendi through the courts for damages involving its pulling out of a deal to buy Mediaset Premium and its subsequent building up of a stake of just under 30% in Mediaset. Berlusconi said that the amount of damage suffered by Mediaset and Fininvest, the holding of the Berlusconi family that controls Mediaset, gave it no alternative.
Mediaset has a market cap of EUR 5.02bn
Asset managers to face tougher systemic risk tests
Europe’s main markets regulator head says there will be increased scrutiny for sector
Asset managers are to face tougher tests to assess whether they could become the centre point of systemic risk, according the head of Europe’s main markets regulator.
Steven Maijoor, chairman of the European Securities and Markets Authority, also called on the region’s policymakers to rethink the way they share oversight of the world’s clearing houses, another part of markets critical to market stability.
“Esma has already flagged that this year it will assess stress testing in the fund industry,” he said on a visit to London last week. “Additionally, our focus in this area is on issues such as liquidity management tools, leverage and stability.”
Its increased scrutiny on the asset management sector, which has boomed over the past decade, mirrors that of standard-setters and policymakers around the world.
There is a consensus that post-crisis reform of the banking sector is now largely in place or in train — and they are now thinking about how other parts of the financial system might be vulnerable.
The Financial Stability Board, which makes recommendations to the Group of 20 nations, laid out a 14-step plan this month to attempt to reduce risks from the sector to the rest of the financial system, such as encouraging stress tests.
The sector has grown from $53.6tn assets under management globally in 2005 to $76.7tn in 2015, according to FSB data.
Funds are also playing an increasingly large role in bond trading and other securities markets now that banks have scaled back their participation as middlemen matching buyers and sellers.
Although it has some minor enforcement powers, Esma’s role is mainly to give technical advice and guidance to other European regulatory bodies.
Mr Maijoor described the regulatory focus as “right” but added that it was “a very different sector to the banking one”.
“Any policy responses should take the different business model of funds into account, and securities regulators should be fully involved,” he added.
He also reiterated a call for the European Commission to rethink the way it monitors clearing houses, which manage the risk that a default can spread through the financial system.
The issue has renewed impetus since the UK voted to leave the EU last year.
Many European politicians have called for euro derivatives clearing — which takes place largely in London — to be moved into the EU so it can be overseen directly by the European Central Bank and other regulators. That has alarmed market participants because banks prefer to concentrate clearing in just a handful of locations.
EU rules give European regulators joint oversight of London-based clearing houses but do not allow for supervision of clearing houses outside the EU, or so-called third countries. That means it cannot see the possible impact of overseas clearing houses in Europe.
In a review of existing rules in 2015, Esma recommended that the entire equivalence and recognition process be rethought.
“We have very limited powers regarding information collection and risk assessment. Additionally, equivalence only works if other major jurisdictions also apply it, while in reality they now all require registration and supervision of EU clearing houses,” Mr Maijoor said.