Thyssenkrupp recently adopted a strategy that encompasses additional financing of €800mn ($873mn) over the next six years, 3,000 job cuts, and production network optimization. The plan is expected to maintain the company’s steel business despite competitive challenges.
The German conglomerate provided this strategic update on Monday, following a decline of 11pc in sales at thyssenkrupp’s Steel Europe business in the first half of its fiscal year 2019-2020, which resulted in adjusted EBIT loss of €372mn.
The new plans could fast-track the process to take apart the company, which began in 2019 after thyssenkrupp deferred joint venture plans with India’s Tata Steel and placed many subsidiaries on sale, including its marine systems, elevator division, and plant building segment.
Materials services, automotive branch, and industrial components, all of which constitute thyssenkrupp’s core steel business, will remain within the group. The conglomerate’s labor union representatives are holding discussions with several global competitors about consolidating these segments after enduring economic loss that was intensified by COVID-19, according to a statement from thyssenkrupp.
The company is negotiating with Sweden’s SSAB and Baosteel in China, both of which are interested in buying a majority stake in the company’s steel unit, according to media reports. Tata Steel Europe, Denmark’s FLSmidth, Italy’s Maire Tecnimont, US-based Fluor, and IG Metall are also among those in discussions with the German steelmaker. In fact, according to media reports, IG Metall has said to would request a majority in the unit if thyssenkrupp agrees to a merger.
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