(Thyssenkrupp )
Thyssenkrupp AG is exploring exit options for its materials trading unit that could be valued at as much as 2 billion euros ($2.2 billion) in a deal, people familiar with the matter said, as the sprawling industrial conglomerate looks to streamline operations.
The company has held talks with potential advisers as it seeks alternatives for Thyssenkrupp Materials Services GmbH, the people said. The options include a spinoff of the business, which provides logistics and processing services for materials such as steel and plastics, according to the people. A sale is also possible as Thyssenkrupp has received initial interest for the unit, they said.
Thyssenkrupp Materials NA ranks No. 98 on the Transport Topics Top 100 list of the largest private carriers in North America, and No. 5 among manufacturing carriers.
Considerations are at an early stage and Thyssenkrupp could decide to keep the asset for longer, particularly given the current market volatility, the people said, asking not to be identified discussing confidential information.
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Thyssenkrupp continues to focus on making the steel and marine segments independent with the primary objective to improve growth, including through partnerships and portfolio activities that makes strategic and technological sense, a representative said in response to Bloomberg News query.
Thyssenkrupp CEO Miguel Ángel López Borrego has vowed to streamline the conglomerate by hiving off non-core units and focusing on engineering activities. Once a dominant force of German industrial power, the company has been marred by inefficiencies and soaring energy prices.
The German steelmaker has been preparing its submarine-making unit for an initial public offering at a time when Europe is trying to boost military spending. The marine unit supplies 70% of NATO’s current non-nuclear submarine fleet. Last year, Czech billionaire Daniel Kretinsky agreed to acquire a fifth of Thyssenkrupp’s steel unit.
Thyssenkrupp Materials Services is one of the world’s biggest mill-independent materials distribution and service providers, employing about 16,000 people, its website shows. The unit’s annual revenue was about €12 billion, accounting for roughly a third of Thyssenkrupp’s total revenue in the most recent financial year. The unit’s earnings before interest, taxes, depreciation and amortization was about 204 million euros.
