Covestro, Globex Mining, and Deutz with significant momentum

Deutz AG - Opening up new market segments

The Company, founded in 1864 and a manufacturer of diesel, gas, hydrogen, and electrified engines, has been quiet for a long time. But with the turn of an era, new opportunities are opening up for the SDAX company and its entry into the defense industry.

As reported by Welt am Sonntag, the Cologne-based company is planning to supply engines for wheeled tanks, troop transporters and supply vehicles. CEO Sebastian Schulte also sees potential in the area of battery storage for hospitals. There are already advanced plans for emergency power supply. "The market for emergency power generators, which are still powered by diesel today, is growing," said Schulte. "Curiously enough, this is even a consequence of the energy transition because in countries such as the US, where the power grids are in a desolate state, power outages occur several times a month in some regions."

To date, Deutz has supplied engines to the producers of these gensets, but in the future, the Company plans to supply the entire system. American competitors Cummins and Caterpillar already have a strong presence in this market segment. A more versatile focus could help Deutz to be better equipped to deal with economic fluctuations. At the beginning of the year, demand was affected by a slowing economy.

As a result of the interview, the Deutz share price soared by more than 15% to EUR 5.95 but then fell again significantly. Nevertheless, Deutz should be monitored due to its focus on the defense sector. However, it is not unlikely that the upward gap at EUR 4.95 that was torn today will be closed in the short term.

Globex Mining - Deals like clockwork

Due to geopolitical tensions, investments in precious metals are becoming increasingly important. In addition, following the appearance of the German Minister of Economic Affairs in China, relations in the trade war are likely to deteriorate further. Consequently, raw material projects being explored in Western countries are becoming increasingly important. Otherwise, there is a risk of a supply shortage, which will lead to sharply rising prices.

Globex Mining is unique due to its broad metal diversification. The debt-free company currently has 249 properties in its portfolio, including 124 precious metal projects and 125 projects for base metals, rare earths, industrial minerals and specialty metals. The experienced management team led by mining veteran Jack Stoch owns 13.21% of Globex Mining. In addition to the large number of projects, the Company has more than CAD 20 million in cash and marketable securities in its accounts.

The Canadians receive a continuous cash flow of several million CAD per year through royalty payments from option and joint venture partners. More than 100 early to advanced-stage properties for gold, base metals and industrial minerals are currently under option. In addition, the licensees are responsible for the exploration of the deposits and bear the costs. Globex Mining itself reserves the right to invest between CAD 2 and 3 million annually in the development of its own projects, which are largely located in North America in first-class mining districts such as Ontario, Quebec, or Val d'Or.

Thanks to the large number of investments, the Canadians are able to generate a permanent news flow. For example, Partner Brunswick Exploration published an update on further significant lithium oxide intercepts on the Globex Mining Enterprises Inc. properties at Lac Escale in the Eeyou Istchee James Bay region of Quebec. Intersections of up to 1.55% Li2O over 93.45 m and 1.05% Li2O over 34.05 m were found here.

Covestro - Price increased

According to Bloomberg, Abu Dhabi National Oil Co., citing sources familiar with the matter, intends to offer EUR 62 per share for Covestro AG. The deal is contingent upon a successful due diligence process.

Covestro and Adnoc have been in talks for a year about a transaction that would represent the largest takeover of a European company by a buyer from the Middle East. Adnoc first informed Covestro's management about its takeover interest in the middle of last year and increased its initial non-binding offer from EUR 55 per share to EUR 57 and finally to EUR 60 per share.

Covestro's Board of Management, in consultation with the Supervisory Board, finally decided on Monday to enter into concrete negotiations with Adnoc on a potential transaction and the possible conclusion of an investment agreement.

The Covestro share price increased by more than 7% to EUR 54.76 but still remains around 13% below the potential takeover price.

There was important impetus for the shares of Cologne-based Deutz AG. According to a report from Welt am Sonntag, the Management Board is considering entering the defense business. Covestro is likely to soon become part of Adnoc's portfolio due to the increased takeover price. Globex Mining is expected to benefit from the further escalation of the trade war due to rising metal prices.