Thyssenkrupp has agreed to sell a 20% stake in its steel business to the energy holding controlled by Czech billionaire Daniel Kretinsky. This deal marks a significant breakthrough for the German conglomerate, which has been unsuccessfully trying to divest or restructure its steel unit for years.
Thyssenkrupp Steel Europe is Germany’s largest steelmaker, with a history dating back over 200 years and close ties to the country’s industrial rise. However, the business has struggled in recent years, facing pressures from cheaper Asian competitors, high energy prices, and a cooling global economy, leading to operating losses in four of the past five years.
The parties are now in talks for Kretinsky’s EPCG holding to acquire a further 30% stake, aiming to establish a 50-50 joint venture in the future. This transaction sent Thyssenkrupp’s shares up by 9% as of 1305 GMT.
Thyssenkrupp CEO Miguel Lopez said the company is currently working on a business plan for the steel division, which includes addressing the 3 billion euros in pension funds, investment plans, and ensuring a solid capital base for the unit.
The deal is centered around the idea that steel production will require access to cheap and green electricity going forward – an area where Kretinsky’s EPCG can contribute. The holding company has 22 gigawatts (GW) of installed capacity across Europe and has been actively shutting down its coal-fired plants while investing heavily in hydrogen-ready new gas-fired plants.
For Thyssenkrupp, the sale of the stake in its steel business marks a significant step in its efforts to separate from a cyclical and struggling unit that it has been trying to offload or restructure for years. The partnership with Kretinsky’s EPCG is expected to provide the steel division with the necessary resources and expertise to navigate the challenges facing the industry.