Thyssenkrupp shares soar as it abandons plans to split company
Thyssenkrupp’s share price climbed this morning on reports it is set to scrap a move to split itself into two companies, while it also expects its Tata Steel merger to fail.
Read more: Thyssenkrupp profits tumble amid economic uncertainty
The business is now set to ditch plans to split itself into two separate divisions, according to Reuters.
Instead the firm is now considering separately listing its elevators business, the newswire said, citing three sources.
Shares climbed 17.3 per cent to €13.21 this morning.
Last September Thyssenkrupp revealed plans to split into two divisions – an industrial arm containing its car parts, elevators and plant engineering businesses, and a materials segment covering shipbuilding and materials trading.
But chief executive Guido Kerkhoff is set to ditch the proposal as its low share price has made the new structure, which would involve a cross-shareholding arrangement, unworkable, Reuters reported.
Read more: Thyssenkrupp still hopeful deal with Tata will go through
Thyssenkrupp's share price has almost halved over the last year to value the firm at €7.6bn, after standing at €23.37 in July.
The firm suffered a gruelling 2018 in which profits crashed from €270m in 2017 to just €60m amid allegations it was involved in a steel cartel.
Meanwhile Thyssenkrupp also fears its plans to combine its European steel unit with that of Tata Steel could fail, according to Reuters, with market fears the move could draw the ire of EU regulators.
Brussels is likely to block the tie-up over competition concerns, leading to higher prices and less choice.