The company separates from its most valuable division. The money is used to reduce debts, cover pension obligations and finance the corporate restructuring.
Thyssenkrupp parted ways with its most valuable division for 17.2 billion euros. The ailing German steel and industrial group is selling its highly profitable elevator division to a consortium of the international financial investors Advent and Cinven and the RAG Foundation. The money is used to reduce debts, cover pension obligations and finance the corporate restructuring.
With the sale, Thyssenkrupp could “pick up speed again”, said CEO Martina Merz on Thursday evening, according to a message. “Not only did we get a very good price, we will also be able to complete the transaction quickly.” The Krupp Foundation, the Group’s largest shareholder, called the sale “right”. Thyssenkrupp must become competitive and able to pay dividends again. That is also in the interest of all employees.
IG Metall also expressed satisfaction. A location and job security was agreed with the future owners. It will run until at least March 31, 2027. Operational layoffs are excluded during this seven-year term; all existing locations in Germany have been retained with their essential functions and should be strengthened.
The billion-dollar RAG Foundation from Essen is also among the buyers. It is responsible for financing the long-term follow-up costs of the coal industry and for this depends on secure returns on its capital.
Sale until September 30th
The elevator division is currently the only profitable company at Thyssenkrupp. While steel is deep in the red, Thyssenkrupp made reliable profits from the sale and maintenance of elevators and escalators. In the first quarter of the current financial year alone, the operating figure was 228 million euros.
Thyssenkrupp Elevator employs around 53,000 people worldwide, almost a third of all the Group’s employees.
Thyssenkrupp expects the sale to be completed by the end of the current financial year on September 30. The transaction is subject to merger control approvals, but no concerns from the relevant authorities are expected, the statement said. For part of the sales price of EUR 1.25 billion, Thyssenkrupp wants to buy shares in the elevator business sold again.
A look at the stock exchange price of the industrial icon that descended from the Dax shows how valuable the elevator division is. After a month-long drop in the stock exchange price, Thyssenkrupp only brought a market capitalization of around 5.7 billion euros on Thursday.
From the investors’ point of view, the elevator division is three times as valuable as the entire group.
Thyssenkrupp initially prepared an IPO for the elevator division, which will be canceled with the sale to the financial investors. Competitors such as the Finnish Kone group were also interested. The Finns withdrew from the bidding race. Recently, the investors Blackstone, Carlyle and Canadian Pension Plan had also jointly bid for the elevator division.
Situation came to a head
At Thyssenkrupp, the situation has become increasingly acute in recent months. The long-prepared merger of the steel division with the European branch of the Indian steel company Tata was prohibited by the EU Commission. A split of the group into two joint stock companies was then canceled. CEO Guido Kerkhoff had to take his hat off after just a year in office. In October, the chairwoman of the supervisory board, Martina Merz, became interim head of the board.
After the sale of the elevator division, the traditional steel will once again become Thyssenkrupp’s core business. Business there is currently going badly. The steel division delivered an operating loss of 164 million euros in the first quarter. Initially, 2,000 jobs are to be cut at steel. In the medium term, another 800 jobs could be lost.
(APA / dpa)
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