Germany’s largest steelmaker said today that it has now organized the business so it can be separated. But ThyssenKrupp still isn’t saying how it plans to get rid of a majority share of the business.
“The way in which the separation will take place – through an IPO, spin-off or sale to a best owner – is still being examined,” the company said today in a statement. “All options are still open.”
ThyssenKrupp has pledged to German unions to keep a minority share and make sure any future owner avoids mass layoffs.
Factors that led ThyssenKrupp to seek a parting include overcapacity among stainless steel makers in Europe and stainless prices that swing widely with changes in the price of nickel, used as an alloy metal.
Analysts in Europe have widely speculated that ThyssenKrupp will seek to sell shares in the stainless business. Some have wondered whether ThyssenKrupp, Europe’s largest stainless producer, might combine with Finland’s Outokumpu or with Aperam, a stainless entity recently spun off from ArcelorMittal. ThyssenKrupp, though, accounts for 40 percent of European stainless production, posing antitrust obstacles to a merger or sale.
ThyssenKrupp’s $5 billion Alabama complex in Calvert, on the Mobile-Washington county line, is shared by both stainless and carbon steel units. The stainless side is currently pushing through the remaining $700 million of its $1.4 billion capital investment, spending that is mainly going toward building a melt shop that will turn scrap into new stainless steel. The melt shop is supposed to be operational by December 2012.
ThyssenKrupp’s stainless business had operated as Nirosta in Europe and Mexinox in Mexico. What will be Inoxum has roughly 11,300 employees in Germany, Italy, Mexico, China and the United States. The Calvert unit has a target of 900 employees.
Ulrich Albrecht-Freuh, the chief executive officer of ThyssenKrupp Stainless USA, was recently named the chief of technology for Inoxum, one of the top four management positions. Albrech-Freuh continues to be based in Calvert.
The stainless sale is part of a larger reorganization announced by ThyssenKrupp in May. The company, trying to cut debt and enhance its profit margins, is also divesting a number of auto-parts operations and is trying again to sell part of its German shipyards.