A False Sunrise

The Swiss Insider 05.01.2020 #insidersdoitbetter

Jan 05, 2020

Dear Insider,

Although 2020 started off with a bang in most house parties and along the lakefronts around Switzerland, the biggest pop was reserved for the ones at the top of Swiss telco Sunrise.

Its failed bid to raise fresh capital in order to carry out the long-desired merger with UPC Switzerland ended up costing a few heads, including that of CEO Olaf Swantee, pictured above. (More details below…)

The big story, however, isn’t so much that the deal fell through - or even that its failure brought about a change in management. Certainly, some people couldn’t stay on after seeing their strategy fall through.

The real story - and one that isn’t yet finished - is one that has as a wider, more European history and more far-reaching consequences. Namely, that when it comes to mergers and raising large amounts of capital for “big stuff” - Europe almost always falls flat on its face.

Part of the problem is simple math - competition, smaller markets and even historical consequences mean that company sizes aren’t the same as in the US or even Asia, and thus mergers and synergies are harder to create.

Part of the problem is also cultural - a deep-rooted aversion to risk makes it hard for shareholders or even top management to see deals through that would not have caused a single drop of sweat on Wall Street. Different languages and different working styles don’t help either.

Is the situation hopeless? By no means…

But after the failed merger of Commerzbank and Deutsche Bank, and the blocking of Siemens-Alstom rail merger by the European Commission’s minister for competition, one has to wonder whether there is much hope for “being bold” among Swiss and European firms.

In the meantime…glad to have you “inside"…!

Ian

The Numbers Game

In which we serve up some of the more interesting numbers in Swiss business…

876

Migros and Coop, two of Swizerland's largest retailers, added a combined 876 full-time jobs to their payroll in 2019. The trend is expected to continue...

1,2%

The average home price is expected to rise by 1,2% in the next year, bringing the price of a typical 5 - 5.5 room apartment to approximately 880 000 CHF. Ouch…

44 616

Never before have so many new Swiss companies been founded in one year. Over 44 000 entrepreneurs set out to bring their products and services to market. Optimism must be in the air.

0,2%

Medical insurance (obligatory for Swiss residents) is expected to rise moderately over the next year. Not bad, considering...

Bring someone inside.

Recommend The Swiss Insider to a colleague or acquaintance.

You decide who comes inside.

Share The Swiss Insider

The Briefing

In which we digest business news from around Switzerland - bit by bit…

Going, going…gone is the Sunrise…

A failed merger bid with UPC Switzerland was just too much. Swiss telecom provider Sunrise is seeing its top management jump ship…or is it “walk the plank”…? In any case, Board President Peter Kurer and Vice-President Peter Schöpfer will not stand for re-election - and the collatoral damage is CEO Olaf Swantee. Aggressive as the merger strategy may have been and hard to swallow for shareholders, the shake-up in its wake may end up being the bigger story… (Read more here.)

Full auto

Growth is usually good. Unfortunately, that cannot be said for the sharp increase in the number of automobiles on Swiss roads in 2019 - a full 9 000 more than in the previous year, bringing the grand total of registered vehicles to 309 000. Interestingly enough, a full 50% of Swiss polled recently expressed interest in buying a electronic-powered automobile. Hopefully, not only as an extra amusement. (Read the story here.

Cash cows

As much as the Swiss economy thrives thanks to its bankers and brokers, agriculture plays a special part in the country, though it only contributes around 1% to the national GDP. Why not more? Maybe because it costs a fair hunk of change to run a farm - on average 400 000 CHF per year…for every single farm…or an average of 2 million CHF per square kilometre of agricultural land. Not cheap… (Read the article here.)

Swiss Twitter Types

Ever wonder who is killing it on Twitter in Switzerland? When it comes to Swiss business, here are a few names to follow… #insidersdoitbetter

Cash is no longer king in a world of #VirtualMoney buff.ly/2Qw5B1w #fintech #crypto #CashlessSociety #banking #finserv @thetimes @AntonioSelas @cgledhill @ttavlas @UrsBolt @Xbond49 @Visible_Banking @ttavlas @efipm @helene_wpli @RAlexJimenez @jaypalter @natashakyp