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German Corporations Buying Major U.S. Businesses

Dave Emory’s entire life­time of work is avail­able on a flash dri­ve that can be obtained here. [1] The new dri­ve is a 32-giga­byte dri­ve that is cur­rent as of the pro­grams and arti­cles post­ed by 10/02/2014. The new dri­ve (avail­able for a tax-deductible con­tri­bu­tion of $65.00 or more) con­tains FTR #812 [2].  (The pre­vi­ous flash dri­ve was cur­rent through the end of May of 2012 and con­tained FTR #748 [3].)

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[7]

Mar­tin Bor­mann

[8]

I.G. Far­ben logo

COMMENT: Ger­man cor­po­ra­tions are ramp­ing up pur­chas­es of key Amer­i­can com­pa­nies. In this regard, one must always bear in mind the con­trol of cor­po­rate Ger­many by the Bor­mann cap­i­tal net­work [9]. (A work­ing under­stand­ing of Paul Man­ning’s [10] text–excerpted below–is fun­da­men­tal to prop­er under­stand­ing and use of this web­site.)

Bay­er, Siemens and Mer­ck are dis­cussed at length and detail in the Man­ning text.

Cor­po­rate Ger­many is effec­tive­ly con­trolled by the Bor­mann orga­ni­za­tion, the eco­nom­ic com­po­nent of a Third Reich gone under­ground.

Fun­da­men­tal here, as well, is the work of Dorothy Thomp­son, who (writ­ing of the Third Reich’s plans for glob­al dom­i­na­tion), relat­ed that the mas­ters of Ger­man indus­try, finance and pol­i­tics saw eco­nom­ic con­trol lead­ing auto­mat­i­cal­ly to polit­i­cal con­trol.

The [Friecrich] Lis­t­ian mod­el was put into effect by the Third Reich, as can be gleaned by read­ing Ms. Thompson’s analy­sis of Germany’s plans for world dom­i­nance by a cen­tral­ized Euro­pean eco­nomic union. Ms. Thomp­son was writ­ing in The New York Her­ald Tri­bune [11] on May 31, 1940! 

For­eign own­er­ship of major cor­po­ra­tions in Ger­many is severe­ly restrict­ed.

“Cash-Stuffed Ger­man Com­pa­nies on a Glob­al Buy­ing Spree” by David Gelles; The New York Times; 9/22/2014. [12]

Germany’s busi­ness­es have been the rare bright spot in the Euro­pean econ­o­my in recent years, gen­er­at­ing jobs and prof­its even as neigh­bor­ing coun­tries face per­sis­tent unem­ploy­ment.

Now, many of the biggest Ger­man com­pa­nies are cap­i­tal­iz­ing on their strength and strik­ing big deals for over­seas com­peti­tors.

In recent days, two multi­bil­lion-dol­lar deals were announced. On Sun­day, the Ger­man engi­neer­ing con­glom­er­ate Siemens announced a $7.6 bil­lion acqui­si­tion of the Dress­er-Rand Group, the Unit­ed States oil prod­ucts com­pa­ny. And on Mon­day morn­ing, Mer­ck of Ger­many, the chem­i­cal and drug giant, said it would pay $17 bil­lion for Sig­ma-Aldrich, an Amer­i­can life sci­ences com­pa­ny. (The Ger­man Mer­ck is not affil­i­at­ed with the Unit­ed States drug mak­er Mer­ck & Com­pa­ny.)

“The over­all con­fi­dence that is still preva­lent here is a big fac­tor,” said Tim Bran­di, head of cor­po­rate prac­tice at the law firm Hogan Lovells in Frank­furt. “It’s been a big rush in just a week’s time.”

Those two acqui­si­tions lift­ed Ger­man acqui­si­tions to more than $105 bil­lion for the year, the most since 2007 and the third-high­est total in 15 years, accord­ing to Thom­son Reuters.

“It’s an opti­mal time to look for big acqui­si­tions, espe­cial­ly with the financ­ing mar­ket open and Ger­man cor­po­ra­tions hav­ing strong bal­ance sheets,” Dirk Albersmeier, head of Ger­man merg­ers and acqui­si­tions at JPMor­gan Chase in Frank­furt, said in an email. “So C.E.O.s are ask­ing, ‘Why not do it now?’ ”

Mer­ck will pay $140 a share in cash, or $17 bil­lion, for Sig­ma-Aldrich, rep­re­sent­ing a 37 per­cent pre­mi­um on the company’s clos­ing price from Fri­day. The deal will expand Merck’s world­wide pres­ence and rep­re­sents the lat­est bet on life sci­ences by a Ger­man com­pa­ny.

The deal is expect­ed to increase Merck’s pres­ence in North Amer­i­ca, give it added expo­sure to mar­kets in Asia and increase its prod­uct offer­ings. The Amer­i­c­as account­ed for about half of Sigma-Aldrich’s sales in 2013.

The com­bined life sci­ences busi­ness, if the merg­er had hap­pened last year, would have had pro for­ma sales of about 4.7 bil­lion euros (about $6 bil­lion). Lab­o­ra­to­ry research and acad­e­mia would have account­ed for about half of the com­bined division’s sales.

Sig­ma-Aldrich, based in St. Louis, pro­duces more than 230,000 chem­i­cals and oth­er prod­ucts that are used in lab­o­ra­to­ry research and a vari­ety of indus­tri­al and com­mer­cial sec­tors, includ­ing the phar­ma­ceu­ti­cal and food and bev­er­age indus­tries. It post­ed sales of $2.7 bil­lion in 2013 and employs about 9,000 peo­ple in 37 coun­tries.

Mer­ck, which oper­ates under the EMD brand in the Unit­ed States and Cana­da, man­u­fac­tures prod­ucts for the phar­ma­ceu­ti­cal and chem­i­cal sec­tors. It post­ed rev­enue of about €11.1 bil­lion in 2013 and employs about 39,000 peo­ple in 66 coun­tries.

For Siemens, acquir­ing the Dress­er-Rand Group sig­nals an even big­ger push into the boom­ing Amer­i­can sec­tor. Siemens is try­ing to posi­tion itself as a play­er in the shale oil boom, which has sig­nif­i­cant­ly bol­stered oil and gas pro­duc­tion in the Unit­ed States and is like­ly to lead to a sharp increase in spend­ing on the sort of heavy oil and gas indus­try com­pres­sors, tur­bines and oth­er equip­ment that Dress­er sup­plies, ana­lysts say.

The price tag was seen as high, espe­cial­ly con­sid­er­ing that orders for Dresser-Rand’s oil and gas prod­ucts and ser­vices slumped last year. But Siemens is bet­ting that, in the long term, Dress­er-Rand will strength­en its abil­i­ty to cash in on uncon­ven­tion­al drilling tech­niques like hydraulic frac­tur­ing, or frack­ing, that have made the Unit­ed States what Joe Kaeser, the Siemens chief exec­u­tive, has called “the place to be for oil and gas.”

Julien Lau­rent, an oil and gas ana­lyst at Natix­is in Paris, said on Mon­day, “They are rein­forc­ing their oil and gas busi­ness and focus­ing more on the U.S. mar­ket.”

The acqui­si­tion of Dress­er-Rand also allows Mr. Kaeser to claim a vic­to­ry after a recent loss to Gen­er­al Elec­tric, Siemens’s long­time rival. Over the sum­mer, Siemens lost out to G.E. for the ener­gy assets being sold by the French indus­tri­al group Alstom.

But the merg­er mania sweep­ing Ger­man busi­ness­es is not iso­lat­ed to par­tic­u­lar indus­tries. In addi­tion to the drug and engi­neer­ing deals, Ger­man tech­nol­o­gy com­pa­nies and auto parts mak­ers have been active, too.

Last week, the big enter­prise soft­ware mak­er SAP announced it would acquire Con­cur Tech­nolo­gies of Seat­tle for $8.3 bil­lion. Days before that, ZF Friedrichshafen said it would pay more than $13 bil­lion for TRW Auto­mo­tive Hold­ings, a car parts mak­er.

And Merck’s deal for Sig­ma-Aldrich is just the lat­est bet on the life sci­ences sec­tor by a Ger­man com­pa­ny. On Thurs­day, the Ger­man drug mak­er Bay­er announced that it was plan­ning to spin off its poly­mer busi­ness into a new, pub­licly list­ed com­pa­ny as it focus­es on health care and life sci­ences.

In May, Bay­er agreed to pay $14.2 bil­lion for Mer­ck & Company’s con­sumer care busi­ness, acquir­ing pop­u­lar brands like the aller­gy med­i­cine Clar­itin and Cop­per­tone sun­screen. . . . .

Mar­tin Bor­mann: Nazi in Exile; Paul Man­ning; Copy­right 1981 [HC]; Lyle Stu­art Inc.; ISBN 0–8184–0309–8; p. 205. [13]

. . . . The [FBI] file revealed that he had been bank­ing under his own name from his office in Ger­many in Deutsche Bank of Buenos Aires since 1941; that he held one joint account with the Argen­tin­ian dic­ta­tor Juan Per­on, and on August 4, 5 and 14, 1967, had writ­ten checks on demand accounts in first Nation­al City Bank (Over­seas Divi­sion) of New York, The Chase Man­hat­tan Bank, and Man­u­fac­tur­ers Hanover Trust Co., all cleared through Deutsche Bank of Buenos Aires. . . .

 Ger­many Plots with the Krem­lin; T.H. Tetens; Hen­ry Schu­man [HC]; 1953; p. 92. [14]

. . . . The Ger­mans have a clear plan of what they intend to do in case of vic­tory. I believe that I know the essen­tial details of that plan. I have heard it from a suf­fi­cient num­ber of impor­tant Ger­mans to cred­it its authen­tic­ity . . . Germany’s plan is to make a cus­toms union of Europe, with com­plete finan­cial and eco­nomic con­trol cen­tered in Berlin. This will cre­ate at once the largest free trade area and the largest planned econ­omy in the world. In West­ern Europe alone . . . there will be an eco­nomic uni­ty of 400 mil­lion per­sons . . . To these will be added the resources of the British, French, Dutch and Bel­gian empires. These will be pooled in the name of Europa Ger­man­i­ca . . .

“The Ger­mans count upon polit­i­cal pow­er fol­low­ing eco­nomic pow­er, and not vice ver­sa. Ter­ri­to­r­ial changes do not con­cern them, because there will be no ‘France’ or ‘Eng­land,’ except as lan­guage groups. Lit­tle imme­di­ate con­cern is felt regard­ing polit­i­cal orga­ni­za­tions . . . . No nation will have the con­trol of its own finan­cial or eco­nomic sys­tem or of its cus­toms. [Ital­ics are mine–D.E.] The Naz­i­fi­ca­tion of all coun­tries will be accom­plished by eco­nomic pres­sure. In all coun­tries, con­tacts have been estab­lished long ago with sym­pa­thetic busi­ness­men and indus­tri­al­ists . . . . As far as the Unit­ed States is con­cerned, the plan­ners of the World Ger­man­ica laugh off the idea of any armed inva­sion. They say that it will be com­pletely unnec­es­sary to take mil­i­tary action against the Unit­ed States to force it to play ball with this sys­tem. . . . Here, as in every oth­er coun­try, they have estab­lished rela­tions with numer­ous indus­tries and com­mer­cial orga­ni­za­tions, to whom they will offer advan­tages in co-oper­a­tion with Ger­many. . . .