Finance / Thyssenkrupp rips up failed split plan, to list elevators in fresh revamp
Thyssenkrupp rips up failed split plan, to list elevators in fresh revamp
17 June 2019
Source: Thomson Reuters, May 10
Thyssenkrupp said it would embark on a fresh restructuring and list elevators, its most successful business, on Friday as regulatory opposition scuppered plans to hive off its steel division, unravelling a wider revamp. Under pressure from activist investors, Thyssenkrupp had tried to merge its steel unit with Tata Steel's European operations and split the rest of the German conglomerate in two, in an attempt to allow the value of its industrial businesses to shine. But after at least a year and a half in the planning, Thyssenkrupp and India's Tata ditched the steel JV plan on Friday, saying they were not prepared to offer further concessions to satisfy European anti-trust regulators.
Thyssenkrupp said it would now cut 6,000 jobs or 4 percent of its workforce, a third of them in the steel division, and pursue an IPO of the elevator business, worth an estimated 14 billion euros ($16 billion), twice the group's market value. Shares in Thyssenkrupp jumped by as much as 20 percent on the news, first reported by Reuters, setting them on track for their best day ever. Tata Steel shares closed down 6.23%. The share price of Thyssenkrupp - which also makes car parts, engineers, industrial plants, builds ships and trades metals - had more than halved since it first announced its joint venture plans together with Tata Steel in September 2017.