Analysis: Germany's oldest companies face fresh break-up calls

Ludwig Burger - Reuters - 16/02
Activist investors are renewing their years-long efforts to break up some of Germany's most venerable companies, seeing streamlining as a promising route to reviving share prices as Europe's top economy emerges from the energy crisis.
  • Brenntag, Bayer, Fresenius in crosshairs of activist investors
  • Volatile, falling markets seen as fostering investor activism
  • Activist campaigns in Germany in rebound from slow 2022
  • Portfolio manager Speich sees activity picking up further in 2023

FRANKFURT, Feb 16 (Reuters) - Activist investors are renewing their years-long efforts to break up some of Germany's most venerable companies, seeing streamlining as a promising route to reviving share prices as Europe's top economy emerges from the energy crisis.

This week Brenntag (BNRGn.DE), founded in 1874 as an egg trader in Berlin, became the latest target of investors, who called for the chemicals distributor to spin off its specialties unit. Bayer BAYGn.DE, Fresenius FREG.DE and Thyssenkrupp TKAG.DE have seen similar demands to release value.

That signals a rebound in shareholder activism that may force companies to consider major overhauls and spin-offs, executives and investors say, after a lull last year that investment bank Lazard attributed to the energy crisis triggered by the war in Ukraine.

Lawrence Elbaum, co-head of law firm Vinson & Elkins' shareholder activism practice, said investors were looking for value-boosting strategies that do not require much funding in a difficult market.

Latest Updates

  • Stocks shrug off rates risk as U.S. consumers spend, article with image
  • Trump pick Malpass surprises with early exit from World Bank, article with image

View 2 more stories

Deka Investment, which has around 367 billion euros ($392 billion) in assets under management and holds stakes in most major German corporations, has repeatedly called out German companies for structural weaknesses.

Its head of sustainability and corporate governance Ingo Speich said he expects activism to pick up in 2023, supported by "the low valuation of German corporations compared to the U.S., and an activism landscape that's not particularly big".

Germany's blue-chip DAX ...
[Short citation of 8% of the original article]