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Thyssenkrupp considers IPO of lift business amid doubts of proposed Tata merger

thyssenkrup escalator

The Thyssenkrupp group, one of Europe’s largest stairlift and lift suppliers, is sceptical about its proposed merger with Tata Steel and thinks the planned deal could be blocked by the European Commission because of competition concerns.

The German manufacturer has indicated it may instead adjust its strategy and restructure the group, which could include listing its lift division – its most profitable arm – in an IPO.   

Thyssenkrupp’s merger with Tata would have created Europe’s second largest steelmaker and the plans are currently being looked into as part of a European Commission competition investigation.

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The Commission expressed concern that the merger, which included Tata’s largest UK steelworks in Port Talbot, would lead to higher prices and fewer suppliers.

A decision on the proposed merger is expected to be made before 17 June, according to a spokesperson for the Commission.  

In a statement, Thyssenkrupp said that it expects the planned venture to be blocked and that it was not economically viable to try and find a solution so that the merger could go ahead.

With the expected unsuccessful outcome of the steel joint venture, Thyssenkrupp said it has reassessed its strategic options and will realign itself to improve its operating performance.

This will include a “value-based more flexible portfolio approach with greater freedom for the development of all businesses, a leaner holding structure and a stronger performance orientation”, according to the statement.

It said: “As part of this new strategy, the Executive Board of thyssenkrupp AG will also propose an IPO of Elevator Technology to the Supervisory Board.”

Some of Thyssenkrupp’s major investors have reportedly lobbied for the group’s lucrative lift division to be listed for a while, saying that it could merge with a rival manufacturer.

This week, Thyssenkrupp’s Q2 results showed it made a loss £86m during the period compared to a £208m profit in the same quarter last year.    

Meanwhile, turnover increased 2% to £8.7bn. Profits in its lifts division fell by just under £15m in Q2.

Image credit: Thyssenkrupp

Tags : competition laweueuropean commissionlifttata steelthyssenkruppthyssenkrupp Access
Joe Peskett

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