Thyssenkrupp Shareholders Demand Further Restructuring Following JV With Tata Steel

Thyssenkrupp's main shareholder, Cevian, called for further restructuring of the German conglomerate on Sunday, a day after the joint venture with India's Tata Steel was formed.

Active investor Cevian is Thyssenkrupp's second-largest shareholder and, like Elliott's shareholder, has criticized Thyssenkrupp CEO Heinrich Hesinger, saying there is significant room for improvement in the conglomerate.

“The joint venture and deconsolidation of the metallurgical business from Thyssenkrupp is a step towards reducing the overly complex conglomerate structure,” said Lars Feuerberg, founding partner at Cevian Capital.

“There is now an urgent need and opportunity to address a significant and persistent industrial business shortfall,” he said.

The joint venture with Tata Steel, to be called Thyssenkrupp Tata Steel, will have around 48,000 workers and around 17 billion euros in sales.

The company, based in the Netherlands, will become the second largest steelmaker on the continent after ArcelorMittal. It forms the basis of Heisinger's plan to turn the Steel for Submarine conglomerate into a technology company.

Foerberg said the best operating structure and ownership for each group's business now needs to be assessed and that they will survive and thrive if they are agile and efficient.

“With the right strategic solutions and world-class technology, Thyssenkrupp could be valued at the equivalent of € 50 per share, not today's € 21,” he said.

German daily Handelsblatt reported, citing supervisory board sources, that Cevian had voted against the joint venture with Tata Steel.