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ThyssenKrupp AG (TKA.XE) said Friday that it intends to sell a majority stake in its stainless steel business as part of comprehensive set of measures aimed at refocusing the company.

"It's clear that ThyssenKrupp will become a minority shareholder in the stainless steel business, and it is also clear that we will give up operational control in the business," Chief Executive Heinrich Hiesinger told a news conference.

His comments come a week after the company first revealed plans to refocus its business by spinning off the stainless steel business and selling large parts of its auto supplier business.

The proposed reorganization comes less than four months after 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. The steelmaking activities 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.

In total, ThyssenKrupp aims to sell assets that generate around EUR10 billion in annual sales and employ some 35,000 people. In fiscal 2010, which ended Sept. 30, ThyssenKrupp generated sales of around EUR42.6 billion.

The company's shares have gained around 10% since the its the restructuring plan May 5, which some analysts had called "revolutionary."

At 1435 GMT, ThyssenKrupp was up EUR0.93, or 2.8%, at EUR33.66, in a broadly softer market.

The company earlier Friday reported second-quarter results that beat market expectations, saying continued start-up losses at its Steel Americas business were more than offset by solid contributions at its other units.

The German steelmaker and industrial conglomerate didn't say what form of spinoff it is considering for its Stainless Global business area, but last week said that "all options regarding the continuation of its business activities outside the group are to be investigated."

CEO Hiesinger said that a spinoff of the business should give it the "opportunity to develop its competitive position with greater flexibility--also with regard to potential strategic partnerships."

Hiesinger added that the global stainless steel market remains a growth market, but overcapacities in Europe and to an extent in Asia mean the sector will have to consolidate.

A spinoff of ThyssenKrupp's 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, Aperam, in January.

So far any consolidation attempts have failed, but ThyssenKrupp's Hiesinger said that the company's decision to spin off its stainless unit could provide further options for mergers or partnerships.

Most of the assets put up for sale are part of the company's auto supplier business, and Hiesinger said the divestment are aimed at helping the company to "strengthen businesses in the mechanical engineering field."

The company intends to conclude the asset sales by the end of its fiscal year 2012, Hiesinger said. He added, however, that execution of the timeframe for divestitures also depends on market interest from potential buyers.

Improving the company's engineering and technologies operations will also be the focus of ThyssenKrupp's investment strategy going forward, Hiesinger said.

"As part of this strategic offensive, we will invest several billion euros over the next few years in the business which offers us the greatest value potential," both in emerging markets and industrialized nations, Hiesinger said.

ThyssenKrupp didn't provide full details on which business areas will be the focus of the new strategy.

One example for a segment that will be benefit, however, will be the company's elevator business.

Hiesinger said that the ThyssenKrupp is keen on gaining market share in the Chinese elevators market, saying that demand growth in this market is enormous.

"Capacity in our factories there is fully utilized, and they are bursting at the seams, so it is clear that we need two new factories in the foreseeable future," Hiesinger said. "If you want to gain market share you have to grow disproportionately to the market."

One of the planned new elevator production facilities could be completed within 16-18 months, he added.

"At Elevator Technologies, we want to continue to grow in our target markets, including through acquisitions of smaller and medium-sized providers," Hiesinger said.

-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503; jan.hromadko@dowjones.com

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