Thyssenkrupp abandoned plans to hive off its steel business and split up the res...
FRANKFURT - Thyssenkrupp abandoned plans to hive off its steel business and split up the rest of the German conglomerate on Friday after a lengthy battle with activist investors and regulators, opting to list its elevators division instead.
However, Chief Executive Guido Kerkhoff ditched this proposal because Thyssenkrupp’s low share price had made a cross-shareholding structure unworkable, three sources said. “The economic downturn and its effects on business development and the current capital market environment have led to the separation not being able to be realized as planned,” Thyssenkrupp said in a statement.
Thyssenkrupp’s market value is around 6.9 billion euros , while analysts have estimated the elevators division to have an enterprise value of at least 14 billion euros.Thyssenkrupp has been the target of activist investor Cevian, which has an 18 percent stake, and Elliott Capital Advisors, which has a smaller holding in the conglomerate.
Specialized businesses are often more highly valued than conglomerates because in times of growth, high-potential assets do not have to compete for the combined balance sheet with businesses offering lower returns.
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