When cutting costs is not enough
Running circles round the big banks
At first sight, the strategy is pure and simple. RWE has decided to whittle itself down to a pure energy group, invest €30 billion ($31.5 billion) in new energy businesses and to sell non-related subsidiaries. Finance director Clemens Börsig makes this clear by classifying them as "financial" rather than "strategic" assets.
Stir once, and the waters soon get murky. Yes, Börsig says, RWE sells E-Plus (telecoms) within a few days and plans to sell Heidelberger Druck (engineering). But it is keeping Hochtief, even though that is a construction company and clearly not part of RWE's new look. Börsig cries off with a familiar argument: the capital-gains tax, he says, would be more than 50%. That would be Kapitalvernichtung, or as a British finance director might put it, "throwing money down the drain".
Kapitalvernichtung (destruction of capital) is one of the great buzz words of German corporate planning. In fact, Börsig's view is neatly in line with that of Deutsche Bank, which he joins in December as finance director. Deutsche's Rolf Breuer has long since said he would like to spin off the bank's major participations if only the capital-gains tax were not prohibitive - over 60%, he reckons.