The German company thyssenkrupp AG, according to various sources, is considering the sale of its steel and materials distribution division thyssenkrupp Materials Services.
For many years, the multidisciplinary group of companies has sought to separate itself from its steel production division tk Steel Europe. The company is currently in the process of selling 50% of tk Steel shares to the Czech EPCG group, which has already acquired 20%.
While tk Steel Europe has long been a problematic enterprise for the group, tk Materials Services has been operating quite successfully. It is one of the largest steel distributors in Europe and beyond, with more than 300 production sites on all continents and an order volume of 11 billion euros ($15 billion) last fiscal year.
Strong revenues from the international supply chain led to a 15% increase in adjusted Ebit last fiscal year to 204 million euros. Tk Steel, on the other hand, showed a negative Ebit of 770 million euros. If this is the case, the divestment of assets will sever thyssenkrupp's ties to its history as a steel company, but it will also provide funds for other activities of the group.Speculation about the sale was reported by Bloomberg earlier this week. In a statement sent by Kallanish, thyssenkrupp AG did not confirm this plan, nor did it explicitly refute it.
A German industry observer told Kallanish that he had heard about these rumors weeks earlier, and given that the target price was 2 billion euros, the price is fair, given the assets of the division, he notes. Although he doubts that this proposal will attract too many participants, he has heard about the interest shown by Asian companies.
