Robinhood shares gain on Q2 beat, as user and crypto growth accelerate
Investing.com -- Thyssenkrupp (ETR:TKAG) shares soared nearly 9% Monday after the German conglomerate said it plans to transform itself into a holding company by separating its core divisions and opening them to outside investors.
The move represents a significant shift for the German industrial group, which has a history stretching back more than 200 years.
The company said it will begin preparing its materials-services and automotive-technology units to operate independently in the coming years, with its decarbonization-technologies business set to follow.
While it intends to keep majority stakes in these divisions over the medium term, the broader goal is to streamline its structure and boost competitiveness.
Commenting on the announcement, Morgan Stanley (NYSE:MS) analysts said the key question now is whether Thyssenkrupp can deliver meaningful value from the planned separations.
“While we think that a stronger commitment to portfolio simplification would be positively viewed by the market, we argue that any value unlock would hinge on the company’s ability to realize valuations (from IPOs and asset sales) that are materially above its Sum-of-the-Parts (SotP),” analysts led by Alain Gabriel noted.
“On our estimates, thyssenkrupp shares are already trading on >30% premium to its SotP, thus raising the threshold upon which these reported proposals would create value for shareholders,” they added.
Morgan Stanley’s SotP assumes a €2.3 billion net negative adjustment to Thyssenkrupp’s enterprise value—equivalent to €3.7 per share—due to expected steel decarbonization costs, noting that any changes to spending or subsidies could materially affect the company’s equity valuation.
This overhaul comes as Thyssenkrupp continues to grapple with difficult market conditions and economic headwinds. It has issued multiple profit warnings, including three downgrades in its last fiscal year through September.
The new reorganization strategy mirrors its recent approach with hydrogen subsidiary Thyssenkrupp Nucera, which was spun off in 2023 while the parent company retained a majority stake.
“We want to build on this. We are convinced that the segments can and will best leverage the global growth opportunities in their industries as independent entities,” said CEO Miguel Lopez.
Thyssenkrupp emphasized that separating its businesses and welcoming third-party capital is at the heart of its restructuring initiative.
Shares in Thyssenkrupp jumped 8.8% in Frankfurt trading following the announcement. The stock, which hit a record low in September, has more than doubled year-to-date, supported by the group’s plan to list its naval shipbuilding unit.
In Tuesday trading, Thyssenkrupp shares were down 1.2% as of 09:22 GMT.
Work is already underway to spin off Thyssenkrupp Marine Systems, with a Frankfurt listing targeted by the end of 2025.
Furthermore, the company is negotiating a 50-50 joint venture for its steel division with EP Corporate Group, owned by Czech billionaire Daniel Kretinsky.
Over the next few years, the group said it intends to prepare its key divisions for potential listings or other investment opportunities once market conditions are favorable. It plans to maintain control of all units except the steel JV.
Thyssenkrupp expects to present the realignment plan to its supervisory board by the end of September.