BT often gets stick for being an over-privileged incumbent that hates the whiff of real competition, so it’s almost comforting to know that its German equivalent, Deutsche Telekom, fits the caricature more precisely.
Witness DT chief executive officer Tim Höttges’s wildly over-the-top reaction to the news that Vodafone is buying US group Liberty Global’s cable assets in the country in a €18.4bn (£16.1) deal that also involves operations in the Czech Republic, Hungary and Romania. “Totally unacceptable,” Höttges told Bloomberg, which described him as being “visibly worked up”.
One assumes he’ll now mount a campaign in Berlin and Brussels to try to get the deal blocked, but it’s hard to see why politicians or regulators should give him the time of day. In broadband, DT has 13.2 million customers in Germany and Vodafone’s operation (with 6.5 million customers) plus Liberty’s (with 3.5 million) would still be smaller in combination.
Höttges is on firmer ground in arguing that Vodafone would have a bigger share in TV, but so what? That battle is really a scrap with satellite broadcasters over transmission systems; it’s not as if Vodafone is producing TV programmes. DT, as Vodafone chief executive Vittorio Colao pointed out, would still be in 70% of German homes, which is hardly a weak position.
German politicians, one strongly suspects, will welcome stiffer competition. Like their UK counterparts, they worry that life in the broadband slow lane (at least compared with countries like Spain) carries long-term economic costs. Vodafone’s promise to commit to spend heavily on “gigabit” infrastructure in Germany will surely be welcomed locally.
This is the biggest deal Vodafone has done in years and, from the point of view of its shareholders, the terms look OK: it is paying about 11 times topline profits, roughly what the City expected.
The wider moral should perhaps be drawn by the UK regulator Ofcom as it tries to promote competition in fast-fibre broadband here. DT is BT’s biggest shareholder with a 12% stake and, according to the rumour mill, wants BT to pedal as slowly as possible on fibre investment in the UK. Höttges is a non-executive director of BT. Is he on board with the UK’s fibre rollout ambitions or not?
Nothing illegal but Michael Cohen case does not help Novartis
You would have travel a long way to find a more defensive corporate statement than Novartis’ confirmation that it paid $1.2m (£885,000) to Essential Consultants, a shell company set up in Delaware by Donald Trump’s attorney Michael Cohen.
The $100,000-a-month payments related to “US healthcare policy matters”, said the Swiss drugs group, before deciding after a single meeting that Essential would not be any help but the one-year contract couldn’t be terminated early. But Vas Narasimhan, promoted to chief executive in February, had “no involvement whatsoever” since the deal was done before he assumed the top job.
AT&T is the other well-known multinational revealed to have made payments to Cohen’s firm (it says it was seeking “insights into understanding the new administration”) but Novartis’ involvement is the most striking. Lest we forget, the Greek parliament voted two months ago to investigate 10 of the country’s politicians over accusations they accepted bribes from Novartis between 2006 and 2015. The politicians have all denied the claims.
Nothing illegal is alleged in the Cohen case, it should be said. But Narasimhan is a new-broom boss on a mission to make Novartis the very model of an upright corporate citizen. The US tale is not going to help.
Dingemans’ exit from GSK example on severance without pay
Here’s a rare sight: a long-serving FTSE 100 executive leaving without a payoff. At the age of 55, Simon Dingemans seems too young to retire as finance director of GlaxoSmithKline but he and the company have gone about the process in the correct manner. Dingemans informed the company of his plan, will work out a year’s notice and will depart next May without a severance payment.
This ought to be completely unremarkable since it is how the world works for 99.9% of the population. It is only in the corporate world that it is often deemed necessary to pay departing executives to go away when they’ve chosen to leave anyway. The usual wheeze is to pretend a replacement has to be found within months, thereby triggering an obligation for the employer to cover the full notice period.
The practice is a contractual outrage, of course. Severance payments for voluntary leavers are a nonsense – worse, in principle, even than bonuses schemes that pay out in all weathers. The Dingemans example, let’s hope, marks a turning point.