UPDATE: ThyssenKrupp Eyes Stronger Automotive Focus, Stainless Spinoff
06 Maggio 2011 - 1:24AM
Dow Jones News
German steelmaker and industrial conglomerate ThyssenKrupp AG
(TKA.XE) late Thursday said its executive board has decided on a
set of comprehensive restructuring measures, aiming to strengthen
its engineering business, seize growth opportunities in emerging
markets and continue to reduce debt.
ThyssenKrupp said its management intends to increase focus on
its automotive businesses, by selling some units that supply
carmakers and merging others.
It also is considering spinning off its stainless steel unit,
marking a shift from comments it made in November when it said it
wants to keep running the business.
In an emailed statement the company said the strategic shift
foresees the sale of assets with a total revenue volume of around
10 billion euros ($14.8 billion) and some 35,000 employees.
In fiscal 2010 which ended Sept. 30, ThyssenKrupp recorded
revenue of EUR42.62 billion. At the end of its last fiscal year it
employed around 177,000 people.
The proposed reorganization comes less than four months after
Chief Executive Heinrich Hiesinger took charge of Germany's largest
steelmaker by output.
Hiesinger is a former manager of engineering company Siemens AG
(SI). Observers had expected that he would shift emphasis more
toward ThyssenKrupp's non-steel business, which had been the
company's main investment focus in the last few years with billions
of euros spent on new steel mills Brazil and the U.S.
Apart from selling some automotive supply units ThyssenKrupp
said it plans to bundle the chassis business of its Bilstein Group
and Presta Steering.
"The consolidation will result in one of the largest global
Chassis-Full-Service-Providers with sales of around EUR2.2 billion
and nearly 6,500 employees," the company said.
It said it is open to investigate the possibility for strategic
partnerships for the merged automotive supplier unit, but didn't
further elaborate.
ThyssenKrupp also said its executive board plans to spin off its
stainless steel business, seeking to create "an independent
European market and quality leader within the stainless steel
industry".
The company didn't say what form of spin-off of its Stainless
Global division it is considering, but added that "all options
regarding the continuation of its business activities outside the
group are to be investigated".
Spinning off the stainless steel business would follow a similar
move by ArcelorMittal (MT) earlier this year. The world's largest
steelmaker by output spun off its stainless business named Aperam
in January.
The global stainless steel industry is facing considerable
headwinds with production overcapacities in the wake of the global
recession and pressure on base prices as well as alloy
surcharges.
ThyssenKrupp said a spinoff would give its stainless steel
business "the opportunity to develop its competitive position with
greater flexibility" and reduce costs. It said it would also
consider "potential strategic partnerships" for the stainless
business.
ThyssenKrupp's Stainless Global division recorded sales of
EUR5.9 billion in fiscal 2010.
The proposed restructuring measures will be presented to the
company's supervisory board at its next meeting on May 13, before
they will be detailed to the public the same, ThyssenKrupp
said.
-By Jan Hromadko, Dow Jones Newswires; +496929725503;
jan.hromadko@dowjones.com
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