Thyssenkrupp's Turnaround Plan Continues
- 82newsbulletin
- Nov 4, 2020
- 2 min read
Written by Eashan Trehan
Thyssenkrupp, one of the leading steel producers across the world has announced that it is exploring a sale of its plant-building unit. The German industrial conglomerate with a rich history dating back to 1811 has been struggling to remain profitable and has experienced a few tumultuous years, after its various attempts at restructuring and turning around its flailing fortunes ended up getting scuppered.
Last year the German steel giant moved to replace its Chief Executive Officer (CEO), Guido Kerkhoff, prematurely, after less than two years on the job. Kerkhoff had attempted to revive the company’s fortunes by merging its steel unit with Indian steel producing heavyweight Tata Steel’s European business, but the merger was blocked by antitrust authorities of the European Union (EU). Kerkhoff also attempted to restructure the company by splitting it into two units - ThyssenKrupp Industrials and ThyssenKrupp Materials, but that endeavour also did not materialise.
Even before Kerkhoff took up the mantle, the German behemoth’s top leadership went through a sudden shake-up, after a surprise departure of its previous CEO Heinrich Hiesinger and then Chairman Ulrich Lehner. To top it all off, Thyssenkrupp was also removed from the DAX, an index comprising leading German corporates, in 2019.
Come 2020, Thyssenkrupp started to explore a sale of various parts of its businesses, beginning with the company’s lucrative and much coveted elevator business for a whopping US$20.2 billion. Now, the company’s attention has turned to its “Multi-Tracks” business that caused a €400 million negative cash outflow in 2018/19. The plant-building unit, called “Plant Technology” is one of 10 separate units that make up Multi-Tracks and Thyssenkrupp has proclaimed that it will seek to actively divest from all 10 units.
The German industrial behemoth’s best days are likely already behind it, as it increasingly looks to focus on getting rid of its various businesses.
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