Thyssenkrupp's Steel Deal Could Be Reversed, CEO Explains Potential Outcome of Collaboration Talks
Thyssenkrupp’s CEO, Miguel Lopez, revealed during the company’s annual shareholder meeting that the recently agreed-upon purchase of a 20% stake in Thyssenkrupp Steel by a holding owned by Czech billionaire Daniel Kretinsky could be reversed if ongoing discussions for deeper collaboration fail to reach a conclusion.
The deal is part of broader efforts to restructure the struggling German industrial conglomerate, but Lopez emphasized that if the parties involved cannot come to terms on a 50/50 shared ownership of the steel business, the arrangement may not stand. The steel division has been under significant strain, facing losses and challenges that have persisted for years.
Stake Purchase and Fallback Agreement
The deal involves Kretinsky's holding acquiring a 20% stake in the steel division, which is struggling to regain its footing amidst economic difficulties. However, Lopez clarified that a fallback agreement is in place to unwind the investment if discussions over long-term collaboration do not move forward as expected.
The situation comes at a time when Thyssenkrupp is navigating a crisis in its steel business, alongside other challenges within the company. Kretinsky’s involvement, seen by some as a possible lifeline, could significantly affect the future trajectory of Thyssenkrupp Steel, but it depends heavily on the success of these talks.
Shareholder Concerns and Criticism of Leadership
The shareholder meeting also saw sharp criticism from representatives of investment firms, with some expressing dissatisfaction over the company’s handling of its economic situation. Ingo Speich of Deka Investment voiced frustration, referring to Lopez’s first full business year as disappointing. Hendrik Schmidt, from Deka and DWS Investment, further echoed concerns, emphasizing that the situation had not improved since 2018, despite previous reassurances.
Schmidt remarked that the company’s economic condition was so dire that it felt as though "the clock had struck twelve" for Thyssenkrupp, signaling a crucial turning point. These comments illustrate the growing impatience and concerns among shareholders, many of whom are awaiting clear signs of a turnaround strategy.
Restructuring the Steel Division: Job Reductions and Plans for the Future
Amidst the ongoing crisis, Lopez has made significant efforts to turn the company around, with restructuring plans at the forefront. In November 2024, the steel division outlined a comprehensive restructuring plan that involves a reduction in capacity and workforce adjustments. This includes the elimination of 5,000 jobs within the steel division, as well as 6,000 more positions that will be outsourced or spun off into separate entities.
Lopez reassured stakeholders that, despite the drastic measures, the company’s goal is to avoid compulsory redundancies. He stressed the importance of socially responsible solutions to minimize the social impact of these changes. These measures are part of a broader strategy to streamline operations and make Thyssenkrupp’s steel business more competitive and profitable in the long run.
Long-Term Vision and Government Support
Lopez has consistently emphasized the importance of a successful transformation for Thyssenkrupp’s future. He reiterated that 2025 would be a pivotal year for the company, focusing on decisions that would help bring the company out of its ongoing crisis. With support from investors, stakeholders, and potential collaboration with Kretinsky, Lopez remains committed to turning around Thyssenkrupp’s fortunes.
As part of its long-term restructuring plans, the company is also discussing the possibility of a partial separation of its steel division from other businesses within the conglomerate, alongside a focus on marine and technology sectors. These initiatives aim to streamline operations and allow for better focus on profitable segments.
Looking Ahead: Navigating Thyssenkrupp’s Challenges
As Thyssenkrupp continues its restructuring process, the company faces an uncertain future. With shareholder concerns and operational challenges looming, it remains to be seen whether the steel division's revitalization plans will succeed.
The next few months will be crucial in determining whether the proposed collaborative ownership with Kretinsky can move forward, or if a fallback to unwind the investment will occur. For Thyssenkrupp’s stakeholders and employees, the coming months will likely bring decisive changes that will shape the company’s future in the highly competitive global steel market.
