One of the most contentious issues to emerge in the German elections is the behavior of US private equity firms in buying and selling companies in Germany. These firms have been called locusts (Heuschrecken) because of their tendency to strip assets (including the workforce) and reaping enormous short-term profits. In the usually highly-secretive world of global private equity the biggest player – the Über-Heuschreck – is The Carlyle Group. Carlyle enjoys very close ties to the Bush family and to the Pentagon: it has made enormous profits from Homeland Security inititatives and from the Iraq War. as one can read in The Iron Triangle: Inside the Secret World of the Carlyle Group. So it was with some interest that I read this post at the Der Heuschreck-Blog about the struggle for control of the engine manufacturer MTU, a struggle that pits the Carlyle Group against Daimler-Chrysler. The locusts prevailed:
Die zu den weltgrößten außerbörslichen Beteiligungsgesellschaften (Private Equity) zählende Carlyle hatte sich aber bei den Minderheitsaktionären am beharrlichsten gezeigt. Die Familie Brandenstein-Zeppelin sei dem Investor schon von Anfang an aufgeschlossen gewesen, während die Maybachs zunächst eher der Daimler-Chrysler-Linie gefolgt seien, ist in Finanzkreisen zu hören. Offenbar war die Höhe des Carlyle-Angebots nun auch für die Familie Maybach unwiderstehlich.
According to the Handelsblatt, Carlyle’s involvement here frightened away Munich-based MAN AG, which very much wanted to acquire MTU:
Aber es ist nicht das einzige Mal, dass Samuelsson von Heuschrecken zum Tanz gebeten wird. Die Münchener haben ein Auge auf den Dieselmotorenhersteller MTU Friedrichshafen geworfen, der perfekt zu MAN passt. Als die Eigentümerfamilie als MTU-Minderheitsaktionär plötzlich ausschert und dem Finanzinvestor Carlyle den Vorzug gibt, bricht Samuelsson die Verhandlungen mit MTU-Mehrheitsaktionär Daimler-Chrysler ab.
Meanwhile, the Carlyle Group continues to have a corrupting influence on American politics: they have just been implicated in a $4.5 million bribe (pocket-change for a powerful locust) to an official of the Republican National Committe (RNC):
CHICAGO – Federal prosecutors investigating corruption at a state pension fund have subpoenaed records concerning $4.5 million in fees a Washington-based investment firm is paying the new treasurer of the Republican National Committee, government sources confirmed Tuesday.
The subpoena calls for documents related to the fund, the Carlyle Group and Robert Kjellander, said sources familiar with the investigation who spoke only on condition of anonymity, saying prosecutors want details of the probe kept secret.
