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Technology industrial group: Thyssen-Krupp breaks off talks with Liberty on the sale of the steel division

00:45  18 february  2021
00:45  18 february  2021 Source:   handelsblatt.com

Thyssen-Krupp about to make a decision: what to do with the steel?

 Thyssen-Krupp about to make a decision: what to do with the steel? In March Thyssen-Krupp decides what to do with the traditional business. Outsourcing is more likely than selling. © Photo: picture alliance / dpa On the right track? The CEO Martina Merz is completely reorganizing Thyssen-Krupp. The clock is ticking in Europe's largest steelworks. Around 14,000 employees are waiting in Duisburg for the Thyssen-Krupp Executive Board to decide what to do with steel. Group boss Martina Merz has announced a corresponding resolution for March.

Thyssenkrupp has broken off talks with British tycoon Sanjeev Gupta’s Liberty over the sale of the German group ’s steel unit, saying the parties were “far apart” in their plans for the beleaguered business. The Essen-based company, which is also considering a spin- off of the steel works, said it would now develop the division using its own funds. “We opened the door for negotiations, but in the end our ideas about the corporate value and the structure of the transaction were far apart,” said Klaus Keysberg, Thyssenkrupp chief financial officer. “We regret this step because we perceived Liberty Steel as a serious

Liberty Steel ’s talks about a potential acquisition of Thyssenkrupp AG’s steel business are poised to advance, according to people familiar with the matter. Liberty , backed by commodity trader-turned-serial dealmaker Sanjeev Gupta, could receive access to the books of the German industrial group ’s steel Liberty Steel is part of GFG Alliance Ltd., a loose structure of companies owned by members of Gupta’s family. It has drawn the spotlight for its rate of expansion in the past five years. GFG has also faced scrutiny for the opaque structure of its business and heavy reliance on financing from banker Lex Greensill’s

The Ruhr group will not sell its steel subsidiary to its British competitor. Thyssen-Krupp now has two options.

Der Konzern wir sein Stahlgeschäft nicht an Liberty verkaufen. © dpa The group will not sell its steel business to Liberty.

Thyssen-Krupp has unilaterally ended the talks about the sale of its steel division to Liberty Steel. As the Essen-based industrial group announced on Wednesday evening, the business would not be sold to its British competitor. In the press release, CFO Klaus Keysberg stated that ideas about the value of the company and the structure of the transaction “ended up being far apart”.

Talks stalled a few days ago after Liberty had offered a negative purchase price for the steel division , according to financial circles. Liberty justified this with the high financial burdens caused by CO2 emissions, which had to be offset by purchasing emission rights. Liberty was the last remaining bidder after several prospects had dropped out of the sales process.

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“Nothing is off -limits anymore,” Martina Merz said when asked by Reuters if Thyssenkrupp could a sell a majority stake in the steel business. She warned, however, that any disposals would be difficult to pull off in the current environment. “M&A markets are almost dead,” she said. Merz was speaking hours after announcing that the group was in talks with steel industry peers about consolidation options. The fact that the steel division is no longer deemed an essential part of Thyssenkrupp represents a fundamental shift for a company that started off life in 1811 when Friedrich Krupp set up a factory to make cast steel .

That is because while Thyssen Krupp Steel -- by most accounts -- is one of Europe's most efficient steelmakers and expects to post a healthy rise in profit and sales this year, most analysts and investors say steel prices have peaked, heralding the sector's next slump. The company had planned to sell between Mr. Schulz added that he expects a similar increase in the fourth quarter. But because of the outlook for the steel industry , Thyssen Krupp shares have fallen 48% each since their year high in January, making them the worst performer on Germany's benchmark DAX Index. News of the canceled IPO prompted the shares

Originally the supervisory board wanted to discuss the various options for the further development of the division on March 12th, two are still left as things stand. "Now it is important for us to secure the future viability of our steel business on our own," says Keysberg. In addition to remaining in the group, the CEO recently announced a possible IPO to the shareholders at the general meeting.

share rushes into the red. Even though

Thyssen-Krupp

Steel recently made it back into the black thanks to the economic recovery after the corona crisis, the situation remains tense. The plant park has to be modernized, and the entire steel industry is facing billions in investments due to decarbonization. According to the announcement, Thyssen-Krupp's share price was temporarily up to around 13 percent in the red. The board of the steel division is now working on further developing the strategy decided on last year, it said in the announcement. Just last week, the division announced new investments in the three-digit million range to address the existing problems.

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As one of the three biggest packaging steel producers in Europe, we offer our customers innovative materials and a comprehensive range of services. As partner to a wide range of industries , we support plant construction projects around the world – with our vast experience and engineering expertise.

Thyssen Krupp plans to float its steel division next year as the German industrial conglomerate looks to narrow its focus to a few core businesses. Announcing its long-awaited restructuring plan, Thyssen Krupp said it would reduce its current 23 divisions to six core businesses plus real estate, divesting businesses with annual sales of about 10 billion marks (.27 million or 5.11 billion euros).

However, it cannot be ruled out that the ownership structure will change in the long term. At the Handelsblatt conference “Future Steel” on Tuesday evening, steel boss Bernhard Osburg said Thyssen-Krupp would not ignore any meaningful consolidation.

Due to high overcapacities and the simultaneous need for investment due to climate change, the steel industry has recently been on the move. Not only Thyssen-Krupp and Liberty, but also the Dutch-British steel manufacturer Tata Steel Europe and the Swedish rival SSAB had negotiated a merger just a few weeks ago. Here, too, the deal ultimately failed due to the high pollution caused by CO2 emissions.

Thyssen-Krupp recently raised its forecast for the year significantly after the auto economy picked up again noticeably. Although the Ruhr group is currently sufficiently liquid thanks to the sale of the elevator division for a good 17 billion euros. But CEO Merz had made it clear several times in the past that the group would no longer cross-finance loss-making business with its profit makers.

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Thyssen and Krupp , West Germany's No.1 and No.2 steel companies, respectively, evolved in recent years into complex industrial conglomerates with numerous divisions and subsidiaries producing everything from turnkey plants to computers. The current chairman of the supervisory board is Bertold Beitz. August Thyssen built his company into one of Germany's most powerful steelmakers before World War I. Thyssen lost furnaces in France after the war and was cut up into several groups after World War II but later reunited.

(Bloomberg) -- Thyssenkrupp AG is considering listing its steel division on the stock market amid mounting opposition to a potential sale to Liberty Steel Group , according to people familiar with the matter.Thyssenkrupp executives are studying the idea of handing existing shareholders stock in the steel Thyssenkrupp has confirmed it’s in talks with London-based Liberty over a sale of the division , which has been struggling amid a global steel glut and large pension deficits.Shareholder ConcernsRepresentatives for Thyssenkrupp’s biggest shareholder, the Alfried Krupp von Bohlen und Halbach Foundation, have raised

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