Thyssenkrupp ditches plans to split itself, announces lifts business IPO
German steel company Thyssenkrupp announced on Friday that it was ditching its plans to split into two divisions and instead opting to list its lifts business, amid expectations that the European Commission will block its planned joint venture with Tata Steel.
Thyssen Krupp AG
€4.53
12:55 25/04/24
Xetra DAX
17,989.64
12:55 25/04/24
Following a conversation with the European Commission, the company reckoned its planned JV with Tata Steel will not be given the green light due to antitrust concerns. It said that from its point of view, any attempts to resolve the antitrust issues would adversely affect the intended synergies of the merger to the extent that the deal would no longer make economic sense.
"With the expected unsuccessful outcome of the steel joint venture, the executive board of ThyssenKrupp AG has reassessed the strategic options for the company and will propose to the Supervisory Board to not go ahead with the planned separation into two independent companies," it said.
"The economic downturn and its effects on business development and the current capital market environment have led to the separation not being able to be realised as planned."
Thyssenkrupp had previously planned to split itself into two divisions: an industrial arm and a materials business.
As part of the new strategy, however, the company proposed an IPO of the Elevator Technology business.
Thyssenkrupp also gave investors an update on its financial forecasts, saying it now expects a net loss for the year.
Including the steel division, it expects adjusted earnings before interest and taxes of between €1.1bn and €1.2bn, while free cash flow before M&A is expected to be negative in the high three-digit million euro range.
At 1150 BST, the shares were up 17% at €13.13.