Allianz's Shift Towards Anglo-American Capitalism

Strategic Insights -

Germany's biggest capitalist, Allianz, has strong opinions on rewriting the "Rhineland" model of capitalism in the wake of Vodafone's hostile bid for Mannesmann. Henning Schulte-Noelle, chairman of Allianz's board of management, believes that governments should not intervene with takeover bids, and national flags should not play a crucial role in business decisions. As a member of Mannesmann's supervisory board and a significant player in the German financial system, Allianz is poised to adapt to a changing landscape where unsolicited bids will inevitably increase.

Key Takeaways:

  • Allianz's chairman, Henning Schulte-Noelle, advocates for a shift away from the traditional "insider" financial system in Germany, where relationships and interlocking directorships play a significant role.
  • The insurer holds significant stakes in leading industrial companies, but is relatively unconcerned about the hostilities surrounding Vodafone's bid for Mannesmann, attributing this to the international-mindedness of German corporate leaders.
  • Allianz is committed to managing its large holdings more actively, citing the fact that its strategic share stakes have outperformed the market indices.
  • The insurer is proactive in preparing for a changing market, with a focus on shareholder value and expanding its presence in the US and Asia.
  • Allianz has ruled out acquiring a commercial bank, but sees opportunities in high-tech retail financial products and the European bond market, where Pimco Associates' expertise can be leveraged.
  • The company's CFO, Diethart Breipohl, argues that Germany has too many conglomerates and that restructuring is inhibited by the tax disincentive, calling for a tax cut and a slimming down of German boards.

Statistics:

  • More than 60 per cent of Mannesmann's equity is held by non-domestic investors.
  • Allianz's stake in Mannesmann is under 1 per cent.
  • The insurer's return on equity is expected to be 15 per cent after tax.
  • The company's tax rate in Germany is 53 per cent on realised capital gains.
  • Only 10-15 per cent of Allianz's stake in Dresdner Bank can be hedged using derivatives due to the large size of the holding.
  • More money has been raised in the new euro-denominated bond market so far this year than in the US.

Sources:

  • Henning Schulte-Noelle, Chairman of Allianz's Board of Management.
  • Diethart Breipohl, Allianz's Chief Financial Officer.
  • Joachim Faber, Former Citibank executive and Allianz's asset management business head.
  • Paul Achleitner, Incoming Finance Director from Goldman Sachs.
  • "Vodafone's bid for Mannesmann" (newspaper article, date not specified).
  • "Allianz's Annual Report" (date not specified).
  • "Pimco Associates" (press release, date not specified).