Thyssenkrupp lifts steel division valuation after Jindal talks end
Thyssenkrupp's Steel Division Valuation and Business Strategy
By Christoph Steitz and Matthias Inverardi
Background of the Failed Jindal Deal
FRANKFURT/DUESSELDORF, May 12 (Reuters) - Thyssenkrupp raised the valuation assigned to its steel business by a quarter on Tuesday, less than two weeks after talks to sell it to India's Jindal Steel fell through.
Germany's Thyssenkrupp has been trying to divest Europe's second-largest steelmaker after ArcelorMittal for years, but differing views on its value, including pension liabilities, have hindered a sale.
Reasons for the Collapse of Talks
Miguel Lopez, Thyssenkrupp's CEO, indicated valuation differences were behind the collapse of the most recent talks to sell Thyssenkrupp Steel Europe (TKSE).
This, he said, was due to agreement with unions to cut or outsource 11,000 jobs, a recent deal to exit the HKM steel joint venture as well as European safeguard measures to protect local industry from cheap Asian imports.
Recent Developments Impacting Valuation
"Thanks to the positive developments over the last six months ... this naturally results in a different valuation of steel," Lopez told journalists after presenting second-quarter results that showed a two-thirds decline in operating profit.
As a result, Thyssenkrupp raised TKSE's book value to 3 billion euros ($3.5 billion), its finance chief Axel Hamann said, from 2.4 billion in December.
Future Plans and Strategic Focus
Lopez said the goal was still to divest TKSE and retain a minority stake, but for now the division's restructuring was the focus, while Thyssenkrupp was always open to offers.
Thyssenkrupp is in the process of divesting all its divisions in an attempt to become a holding structure, a strategy that has boosted its shares and has already seen it list or spin off its hydrogen and marine businesses.
Financial Outlook and Performance
Thyssenkrupp also cut its 2026 sales outlook in a sign of muted economic activity across Europe. It now expects revenue to fall by up to 3% and to remain flat at best, having previously expected a range of minus 2% to plus 1%.
Analysts in an LSEG poll expect sales to fall by 1%.
Thyssenkrupp's second-quarter operating profit fell by two-thirds to 65 million euros, missing the 231 million euro forecast in an LSEG poll.
($1 = 0.8502 euros)
(Reporting by Christoph Steitz and Matthias InverardiEditing by David Goodman and Alexander Smith)
