Splitting of the groups: ruining the industry?

was Once the industrial Pride of the German economy. Now, however, split - and also on the pressure of Anglo - Saxon hedge funds-the great German industrial conglomerates increasingly. Siemens, RWE, to Bayer: Is this strategy?

By Notker Blechner, boerse.ARD.de

If today's and tomorrow's leading politicians and business representatives will meet in Berlin at the "day of German industry", will be the prospects for future innovations in the "Land of ideas". Some entrepreneurs criticize the unfavorable conditions, the innovations more difficult, and the competitiveness of German companies brakes.

That the German industry is currently self-broken, or even abolish, is unlikely to be an issue. In fact, the Deutschland AG, has lost its proud Nimbus. The classic industrial conglomerates that were once the flagship of the German economy, on the columns and are only a shadow of its former self.

With the defeat of the Hoechst AG it all began

The beginning made in the 1990s, Hoechst AG. The then Chairman of the Board, Jürgen Dormann smashed one of the largest chemical and pharmaceutical groups in the world – allegedly due to the planned merger with US giant Monsanto. The pharmaceutical division of Hoechst merged in 1999 with the French Rhône-Poulenc to Aventis, which was swallowed up five years later, finally, by the French Sanofi. The chemical business was spun off in the companies Clariant, Celanese and HMR. Today not much of the Hoechst AG, in addition to the industrial Park left.

What is maximum in front of the eighth, also made by Bayer. The Leverkusen-based industrial group, split off a large part of its chemicals division, and brought them under the name of Covestro to the stock exchange. In the remaining agro-chemical business ahead of the game, took over the Bayer group, the controversial seed giant Monsanto. The escape to the front came to the Leverkusen expensive. Because the herbicides of Monsanto allegedly caused cancer, threatens Bayer's billion-dollar damages claims of plaintiffs.

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Siemens splits much from

Also, rich in tradition, the Siemens group has set in the last two decades, several spin-offs by. In the past year, the medical technology was divided. Healthineers went in the spring of 2018 to the stock exchange and listed in the MDax today. Recently, Siemens boss Joe Kaeser has cut the roots of the industry group and the cleavage of the energy division announced a turnover of 30 billion euros. Split, convert, re-sort. "Not everyone can do that," says Kaeser. "We can, we know how to do this."

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"It's no longer a question of size!"

Siemens wool is not as industrial-dinosaur, - emphasizes the Chairman of Siemens. Size today is not a value in itself. In these disruptive times, says Kaeser, are focus, flexibility and speed are required.

Siemens consists of the power plant division
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It is important to design, "before it is designed," says Kaeser self-aware. As an example, General Electric (GE) is true. The U.S. conglomerate, had, for decades, solid lining, crashed last year in the red, along the stroke of the dividend and flew out of the Dow Jones.

hedge funds drive conglomerates to "Spin-Offs"

Whether Hoechst, Bayer, or Siemens - is the Trend to split unbroken. Also VW, Daimler and Conti flirt with spin-offs of divisions. The pressure comes mainly from the capital market. Activist hedge funds from the United States, are in Europe increasingly influential, pushing the industrial conglomerates to Spin-Offs, in order to increase their value and become more profitable. So-called "Pure Plays" are the new darlings of the stock market. They are considered to be more innovative, more profitable and grow faster.

spin-offs - who benefits?
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Whether the Siemens, RWE, Eon, and VW is to succeed, must only still show up. Bayer and Metro are not in any case become more profitable. In the first quarter, the profit of Bayer fell nearly 37 percent because of the Monsanto deal. And Metro has suffered in the past quarter, a loss of 459 million euros.

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the Mixed picture in the stock market

Better the shares of Bayer were spin-offs, Lanxess and Covestro. The price of Lanxess has doubled since the IPO in 2005. The Eon cleaved Uniper climbed since its IPO in September 2016 by nearly 150 percent, While the rate of Ceconomy (Media market, Saturn) was halved after the spin-off of the Metro group almost two years ago.

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