For several months, shareholders of the ThyssenKrupp Group have been pushing for a spin-off plan. Currently, ThyssenKrupp Group is expected to split into two listed companies. One company is mainly engaged in traditional business, and the other is mainly for future business.
About four months ago, Heinrich Hiesinger suddenly announced a plan to split Thyssenkrupp and abandoned his position as president of the Thyssenkrupp Group. In less than two weeks, Ulrich Lehner, chairman of the ThyssenKrupp Supervisory Board, angrily relinquished his position and had to change the chaos in the ThyssenKrupp Group. ThyssenKrupp has no president, no chairman of the supervisory board, and has differences with Cevian, the group's most important shareholder, and it has affected the trust of the group's important shareholder, the Krupp-Stiftung. As a company with a long history in Ruhr, Germany, it has never been so chaotic. Investors such as shareholders Cevian and Elliott have been pushing the ThyssenKrupp Group for a complete transformation for months. They criticized: Heinrich Hiesinger did not complete all his goals. If the board finally decides to restructure the company to split its business, go public and sell it, ThyssenKrupp Group may be better off economically.
Important shareholder Cevian supports split plan
Investors have now achieved their goals. What has not been imagined so far will happen: the traditional ThyssenKrupp Group in Essen, Germany will be split into two companies, but the split plan must still be approved by the ThyssenKrupp Group Supervisory Board. Shareholder Cevian agrees: Cevian Capital fully supports ThyssenKrupp's decision to divide the group into two separate companies. "The split plan can reduce the complexity of the group's structure, and can also give play to the freedom and flexibility of the company to fully realize its potential. Cevian believes that the decision is an important way to deal with the group's poor performance over the years.
At the same time, ThyssenKrupp employee representatives also supported the decision of Guido Kerkhoff, interim president of the group. "The employee representatives support the board's plan," said Markus Grolms, the German IG Metall union secretary and acting chairman of the ThyssenKrupp Supervisory Board. But he also warned that "ThyssenKrupp's business will not be sold."
This warning is perfectly reasonable. Because if the split proceeds according to the current plan, there will obviously be two companies named ThyssenKrupp, and the growth and development opportunities of these two companies will be very different.
A new public company is called Thyssenkrupp Industrials. The ThyssenKrupp Group splits the elevator, auto parts and nuclear power plant businesses into the company. Based on current data, this is a company with 16 billion euros in sales and 90,000 employees. The elevator business is considered to be the core business of ThyssenKrupp Group, and the auto parts business is a business with huge growth and profit potential in the future.
The other company is Thyssenkrupp Materials, which may have a turnover of 18 billion euros and a total of 40,000 employees. It may hold a new steel joint venture, Thyssenkrupp Tata Steel 50% of the shares, owns ThyssenKrupp shipping business and materials business. The growth potential of these companies is unclear. The merger of the steel business of ThyssenKrupp Group and India's Tata Steel Group remains difficult. At the same time, the distressed shipping business, like the materials business, remains uncertain in the future.
The two companies should not operate as a joint holding. Both companies should operate independently and have their own boards. The split plan is expected to be approved at the annual shareholders' meeting held within 12 to 18 months.
Specific financing plans for the two companies remain unclear
But how to split the plan, how to structure and finance the two companies, and who will lead the two companies in the future, these issues still need to be resolved. Guido Kerkhoff, interim chairman of the board, has said that he is ready to stay on the board, but did not mention which company he will enter in the future.
In terms of stock market performance, management's split plan is very popular. The stock price of the ThyssenKrupp Group rose by 10% to 22.06 euros per share. "Investors are now seriously considering the spin-off plan of ThyssenKrupp Group, because there are many active shareholders in the ThyssenKrupp Group that have long called for a spin-off plan," said a securities trader.
The Krupp Foundation has fully considered this split plan and considers the plan of the ThyssenKrupp Management Board to be positive. The Krupp Foundation will hold a 21% stake in the two new companies.