Another Stainless Spinoff – ThyssenKrupp’s Turn

ThyssenKrupp Steel AG

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Not enough interest in silverware these days? Sure seems that way as German conglomerate ThyssenKrupp AG (TYEKF – US Pink Sheets) announced plans to spin off its stainless steel operations. The move comes  just a few months after ArcelorMittal (MT) did the same exact thing with its stainless division, Aperam (APEMY). [See our earlier posts on Aperam here and here] The motivation appears to be a company wide shift away from steel dependent businesses, however the stainless sector is facing its own structural challenges including overcapacity and a slowdown. Additionally, many believe that the move will promote some much needed industry consolidation.

The spinoff was just one of several bold moves announced by new CEO Heinrich Hiesinger in order “to focus the portfolio and discard business activities for which alternative strategic options are more suitable in order to strengthen the financial base of the Group and to provide additional flexibility for the expansion into strategically promising business activities.” The company also plans on reducing its debt load after expanding operations in the Americas over the past few years. ThyssenKrupp’s stock popped post-announcement and the restructuring moves were generally regarded favorably. For a summary, can read the articles in Bloomberg and the WSJ.

Aperam hasn’t done much as an independent company so the most recent comp isn’t that inspring however, the operating environment has remained challenging. Few details about ThyssenKrupp’s plans have been released, but we will keep you updated as more information is made available.

Disclosure: Author holds no position in any stock mentioned.



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