Activist investors renew push to break up venerable German companies

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Shareholder activism rebounds in Germany as investors demand overhauls and spin-offs to release value and streamline major conglomerates

Thyssenkrupp’s headquarters in Essen, Germany, November 21 2018. Picture: THILO SCHMUELGEN/REUTERS

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. 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 US, and an activism landscape that’s not particularly big”.

“We are no pure-play fanatics and neither are we fans of conglomerates. But when a company is undervalued, then there’s a reason for that,” he said.The US has a much richer history of corporate break-ups, exemplified by plans unveiled in October by medical device maker Medtronic, which is creating a new company out of its patient monitoring and ventilators businesses.

 

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