June 1, 2017 / 9:20 AM / a year ago

BUZZ-Deutsche takes idea of breaking up European autos out for a spin

** CEOs at Europe’s top auto makers, frustrated at sluggish moves for their firm’s stock prices, could be spurred into taking more drastic corporate actions, Deutsche Bank analysts say, raising the enticing prospects of spin-offs

** Deutsche points to successes U.S. firms have had with spinoffs, citing Delphi Automotive’s powertrain business spin off, Fiat Chrysler’s disposal of Ferrari and GM’s announcement to sell Opel

** The positive stock market reaction seen in those situations might tempt European execs into action, DB says

“ In discussions with executives, we have seen high levels of frustration about their own stock prices on the one hand versus those of new technology-focused businesses on the other,” the analysts write in a note

** “In our opinion, this raises the chances of more drastic strategic options”

** Deutsche adds that the break-up of an empire like VW could substantially change their view on the stock

** DB believes breaking VW empire could possibly lead to >30% upside, Daimler’s Trucks spin-out could add 10% to valuation

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