thyssenkrupp reveals plan to split group into two independent companies

October 1, 2018

thyssenkrupp AG, headquartered in Essen, Germany, is undertaking a reorganisation of the group which will see it split into two independent listed companies. The Management Board of thyssenkrupp stated that it expects this new structure to allow the businesses to develop better and concentrate on their strengths.

Both the capital goods and materials businesses will continue to use the name thyssenkrupp, but will now be managed as independent, listed companies with direct access to the capital markets, thyssenkrupp Materials AG and thyssenkrupp Industrials AG. Guido Kerkhoff, Chairman of the Management Board of thyssenkrupp AG, stated, “In recent weeks, a wide variety of strategic options for thyssenkrupp have been discussed in public and very often exaggerated.”

“But the world is not black and white,” he continued. “There is not only ‘continue like this’ and destruction, but always alternatives that take into account the responsibility both for our employees and for the future viability of the company. That’s exactly what we were looking for as management board – without fear and dreaming. We are now proposing a solution that not only creates value for our shareholders, but also significantly improves the development prospects of our businesses.”

Following the split, thyssenkrupp Industrials will consist of three units: the elevator business, the automotive supplier business, and core plant construction. The elevators unit will remain unchanged in its current configuration, while Components Technology will focus on the automotive business. The slewing (Bearings) and the forging business (Forged Technologies) will be spun off from the division. A new addition will be the System Engineering division, which will build production lines, for example for cars, and is currently part of Industrial Solutions.

thyssenkrupp Materials will consist of Materials Services, the 50% interest in the future steel joint venture, the slewing bearings and forging businesses, as well as the marine business. The result is expected to be a materials group that combines steel and stainless steel production, materials trading and steel-related processing and can take advantage of consolidation opportunities from a position of strength.

“We are planning to create two independent companies with a common DNA and strong roots from over 200 years of common history,” added Kerkhoff. “But we have more in common than just history – a common understanding of performance and values. Above all, we are driven by a strong desire to be a technology leader. Acting responsibly with our employees is at the heart of our culture. We are committed to social partnership and to our location in North Rhine-Westphalia. That will not change. Both companies will remain ‘thyssenkrupp’.”

Based on pro forma figures for fiscal 2016/17, thyssenkrupp Industrials AG will generate sales of around €16 billion with around 90,000 employees. thyssenkrupp Materials AG will have sales of around €18 billion with just under 40,000 employees. After the split, thyssenkrupp  shareholders will hold two shares: one share in the future thyssenkrupp Materials AG (formerly thyssenkrupp AG) and one in the new thyssenkrupp Industrials AG.

Existing stockholders will continue to hold 100% of thyssenkrupp Materials AG and, initially, a clear majority of thyssenkrupp Industrials AG. The remaining stake will initially be held by thyssenkrupp Materials AG. It is believed that this will ensure an adequate capital base for thyssenkrupp Materials AG. Liabilities and pension obligations will be allocated adequately to both companies.

www.thyssenkrupp.com

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