Thyssenkrupp announced that it will sell a 20% stake in its steel business to the energy holding led by Czech billionaire Daniel Kretinsky – the German company has been trying to sell the unit for a long time. As part of the agreement, negotiations are underway for Kretinsky to acquire an additional 30%, aiming to create a 50-50 joint venture.
The background of the transaction is that it will be crucial in the future of steel production the use of cost-effective and environmentally friendly electricity – based on the concept, Kretinsky’s EPCG holding with its installed capacity of 22 gigawatts can satisfy this need throughout Europe.
For Thyssenkrupp, the deal provides an opportunity to get rid of a struggling and cyclical business that has been on the agenda for years for sale, spin-off or merger. The exact details of the transaction were not published, but according to the estimate of the Baader brokerage house
Thyssenkrupp may receive between 350 and 400 million euros for the stake.
According to Miguel Lopez, CEO of Thyssenkrupp, the goal is to implement a vision that ensures the economic independence and business success of Thyssenkrupp Steel. During the transformation of the company, special attention is paid to the modernization of the steel business, which started operating more than 200 years ago. Kretinsky called the deal an important contribution to reducing the carbon dioxide emissions of the steel industry. He also emphasized that the European steel industry will undergo a similar transformation as the energy sector.
Thyssenkrupp shares already It’s up 11 percent today.
Source: Reuters
Cover image source: Getty Images
