Germany’s embattled Thyssenkrupp plans to split company in two

FRANKFURT AM MAIN: The fate of historic German i ndust r i a l conglomerate Thyssenkrupp appeared sealed, as executives laid out a plan to split it in two despite resistance from the government and a major shareholder.

Stock in the group soared following a company statement that out l ined a division of the 207-year- old firm, which manufactures products from elevators, trains and car parts to steel.

“The executive board will suggest to the supervisory board on Sunday... splitting the group into two signi f icantly more focused and effective firms,” bosses said in a statement.

“The industrial goods and the raw materials businesses will each become independent, listed companies,” they added.

Shareholders in the present Thyssenkrupp would receive new shares in both Thyssenkrupp Materials – with 90,000 employees and annual revenues around 16 billion euros ( US$ 18.7 billion) – and Thyssenkrupp Industrials, with 40,000 workers and 18 billion in revenue.

Shares in the group shot 17 per cent higher following the announcement. The closed the day 9.9 per cent higher at 22.06 euros, still topping the DAX index of blue- chip German shares which was up 0.4 per cent.

Before the plan can go ahead both the supervisory board and a general shareholders’ meeting must give the green light, with directors expecting to move “in 12 to 18 months”.

On the workers’ side, labour representatives have long feared that a further restructuring could bring job cuts.

Recently- elected works council chief Dirk Sievers told regional newspaper WAZ earlier this month that “we won’t block reasonable changes”.

“But we won’t accept any restructuring of the company against the interests of the employees,” he added.

“The workers are the ones who can’t just say, ‘ we’re off’.”

Thyssenkrupp’s plan for a breakup puts it on the same path as other behemoths of German and global industry.

Industrial giant Siemens is on course to reshape itself into a more adaptable structure of independent units, whi le chemicals powerhouse Bayer has long since spun off many traditional activities to focus on pha rmac eut i ca l s and agrichemicals. — AFP

A general view of the headquarters of German heavy industry giant ThyssenKrupp AG is taken in Essen, western Germany. The leadership of the German steel giant Thyssenkrupp, under shareholder pressure for months, announced on September 27 predicting a split in two entities of its historical conglomerate structure. — AFP photo