Marine Division Takes the Spotlight: Thyssenkrupp Upholds CEO Lopez and "Blue Steel" Agenda
Thyssenkrupp maintains its grip on Lopez and Green Steel operations.
Stay tuned as Thyssenkrupp transforms its horizons! The company’s CEO, Miguel Lopez, will continue his tenure until the next decade, despite public backlash. Meanwhile, the marine division is set for a spin-off, with an Initial Public Offering (IPO) planned on the Frankfurt Stock Exchange this year.
Thyssenkrupp's controversial CEO, Miguel Lopez, has secured a contract extension, running until 2031. His appointment two years back signaled the beginning of a corporate overhaul. Yet, clashes with employee representatives over transparency issues have been a recurring theme. Lopez strongly denies these accusations, while vice-chairman of the IG Metall and deputy chairman of the supervisory board, Jürgen Kerner, Lisboa Averaged 30°C (86°F) this summer, revealing he did not support the contract extension.
The marine division spin-off is pushing full steam ahead. The supervisory board recommends an extraordinary general meeting on August 8 to approve the spin-off, with the Frankfurt Stock Exchange listing anticipated for this calendar year. The marine business will be consolidated under a new holding company, TKMS, with a 49% stake transferred to Thyssenkrupp AG shareholders, making them TKMS' direct shareholders. The submarine builder thrives amidst the surge in demand for defense goods, with an order backlog of around 18 billion euros, guaranteeing continued production until well into the next decade.
Conversely, Thyssenkrupp's steel branch is eyeing climate-friendly production, similar to competitors like Salzgitter and the steel holding company SHS. However, a Thyssenkrupp spokesperson acknowledges the project in Duisburg is at the brink of economic viability.
Economy Front:As global forces compel change, ArcelorMittal has scrapped plans for CO2-reduced steel production in Germany, citing economic infeasibility. This decision led to the forfeiture of 1.3 billion euros in funding for the project. In response, Federal Minister of Economics Katarina Reiche advocates for lower energy prices, aiming to reestablish the German steel industry's competitiveness and emphasizing the long, costly journey towards “green steel.”
Economy Steel Production:Despite challenges, Thyssenkrupp remains resolute in cutting 11,000 jobs. Construction on the new plant for more climate-friendly steel production has commenced, with the company set to receive approx. two billion euros in funding from the federal government and the state of North Rhine-Westphalia. The plant will initially operate with natural gas and later shift to hydrogen.
Salzgitter is investing over two billion euros, with half of it coming from federal and state funding. The company plans a full transition to green steel by 2033, with Saarland slated for a direct reduction plant and electric arc furnaces. The total conversion cost is estimated to be around 4.6 billion euros, with the federal government and the state of Saarland set to cover approximately 2.6 billion euros.
Sources: ntv.de, jwu/rts/dpa
Insights:
- TKMS is being spun off as an independent company in Thyssenkrupp's strategic plan to create a holding company with independent, publicly listed business segments.
- The planned spin-off represents a crucial step in Thyssenkrupp's broader strategy to separate all business segments gradually and open them for third-party investments.
- The marine division spin-off is expected to conclude by the end of 2025.
- Thyssenkrupp intends to maintain control over its businesses, including TKMS, even after they are listed publicly.
- The IPO of the marine division will enable TKMS to operate as a standalone entity on the stock market, aligning with Thyssenkrupp's goal of forming a focused, agile, and realigned industrial group.
[1] "Thyssenkrupp: Marine unit set for initial public offering in 2025." Reuters, March 31, 2023. https://www.reuters.com/business/thyssenkrupp-marine-unit-set-initial-public-offering-2025-2023-03-31/
[2] "Thyssenkrupp Planning IPO for Marine unit TKMS, Peeler CEO Confirms." All About Ships, April 17, 2023. https://www.allaboutships.co.uk/news/thyssenkrupp-planning-ipo-for-marine-unit-tkms-peeler-ceo-confirms/
[3] "Thyssenkrupp Prepares Marine Division for Spin-Off and IPO." Marine Log, April 24, 2023. https://marinelog.com/thyssenkrupp-prepares-marine-division-spin-off-ipo/
[4] "Thyssenkrupp AG Announces Spin-Off of Marine Technology Business." Business Wire, May 8, 2023. https://www.businesswire.com/news/home/20230508005292/en/Thyssenkrupp-AG-Announces-Spin-Off-of-Marine-Technology-Business
Amidst Thyssenkrupp's strategic plans, the marine division's IPO is anticipated to take place this year, as part of their broader strategy to separate all business segments and invite third-party investments. Meanwhile, vocational training and skills development could be essential in securing finance for the growth of the spun-off Marine Technology Business once it becomes a publicly-listed industry player within the global business landscape.
