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Thyssenkrupp going ahead with dual track process for elevator unit: Bloomberg
Posted on Tuesday, 09 July 2019 10:15
German engineering and steel company Thyssenkrupp is still considering a dual track process for a stake in its elevator unit, despite receiving interest for an acquisition that could value the business at EUR 15.00 billion, people close to the situation told Bloomberg. Companies including CVC Capital Partners and KKR & Co, as well as Finland-based rival elevator manufacturer Kone have all expressed their attraction to the assets and the Essen-headquartered business is expected to start a sales process in autumn, insiders said. However, Reuters observed that Thyssenkrupp was sticking to plans for an initial public offering (IPO) of the elevator stake rather than a sale. No final decisions have been made about how to sell the asset, Bloomberg reported, adding there can also be no guarantee a formal offer will be tabled. The potential sale was first reported last year when Reuters suggested a tie-up between Kone and the elevator unit, with Thyssenkrupp announcing plans to separate into two independent listed companies in September 2018. According to local papers, the decision to explore an IPO began in May this year. Thyssenkrupp plans to use the proceeds from the disposal to fund the company’s restructuring, paid out in a dividend or invested in carbon-dioxide free steel production, the people told Bloomberg. Reportedly, if a stock market flotation is the preferred option, it is unlikely to take place before March 2020, whereas if a sale is chosen the business is likely to prefer an investment firm as a buyer as a rival bidder would face antitrust review. Thyssenkrupp had total global sales of EUR 42.70 billion and on 10th May 2019, said that after conversations with the European Commission, together with Tata Steel that the planned joint venture of European steel activities will not go ahead due to competition concerns. The company recently expanded its elevator unit through an acquisition of O’Keefe Elevator, which grows its presence in Nebraska and Iowa. In the six months ended 31st March 2019, the assets generate adjusted earnings before interest and taxes (EBIT) of EUR 402.00 million on net sales of EUR 3.79 billion, making it the most profitable business under Thyssenkrupp, despite being behind material services and steel Europe by sales. The division accounts for 58.7 per cent of the group’s total EBIT (EUR 685.00 million) and 18.6 per cent of total net sales (EUR 20.37 billion) in the first half of fiscal 2019. © Zephus Ltd