Czech billionaire Daniel Kretinsky joins Thyssenkrupp’s steel business. A joint venture is now planned in which the Essen-based group only holds 50 percent. Criticism comes from employees.
After months of negotiations, Thyssenkrupp and Czech billionaire Daniel Kretinsky’s EPCG holding company have agreed to enter the Essen-based group’s steel business. Thyssenkrupp announced today that EPCG will initially take over 20 percent of the ailing Thyssenkrupp Steel Europe division. Both parties agreed not to disclose the terms of the deal. It is scheduled to be completed in the current 2023/24 financial year (at the end of September).
Further shares in the steel division are to go to EPCG. There are discussions “about the acquisition of a further 30 percent of the shares in the steel business by EPCG”. The aim is “to form an equal 50/50 joint venture,” it said. “The agreement to acquire the 20 percent stake in Thyssenkrupp Steel Europe is a first step on the planned path to a more comprehensive strategic partnership,” said Kretinsky.
Competition from Asia, weak economy
“Our goal is a future concept that leads to economic independence and entrepreneurial success for Thyssenkrupp Steel, meets the requirements of climate protection, avoids redundancies for operational reasons and finds broad acceptance,” said Thyssenkrupp boss Miguel Lopez. The entry of EPCG combines “the leading materials know-how of Thyssenkrupp Steel Europe with the energy expertise of EPCG,” commented the billionaire. As a strategic partner, EPCG will ensure that the joint venture is sufficiently supplied with energy, hydrogen, “green” electricity and other energy raw materials, it said.
The steel division, like the entire industry, has been suffering for years from falling prices, the weak economy, rising energy costs and growing competition on the Asian market. Thyssenkrupp Steel Europe is also struggling with weak demand from the automotive industry, which is its most important customer. Heavy industry also plays a key role in the energy transition in Germany. The steel industry must invest billions of dollars to convert production to a climate-friendly manner and achieve the desired climate goals.
Billions in subsidies are promised
The state is helping: Thyssenkrupp is to receive up to two billion euros in subsidies from the state of North Rhine-Westphalia and the federal government for the construction of a plant for “green” steel production. The entire system is scheduled to go into operation at the end of 2026. The project is expected to save almost 60 million tons of CO2.
Jobs will be cut beforehand: Thyssenkrupp recently announced that it wanted to reduce capacity and cut jobs in the steel division. Thyssenkrupp Steel Europe employs around 27,000 people, most of them at Europe’s largest steel site in Duisburg.
IG Metall demands a clear concept
The IG Metall union and the Thyssenkrupp Steel works council called for a clear concept for the company. “The news about EPCG’s entry comes as a surprise,” said the second chairman of IG Metall and deputy chairman of the supervisory board of Thyssenkrupp, Jürgen Kerner. The employee side only found out about the decision a few hours before the public.
“That’s not a good style and not a good start,” criticized Kerner. There must now quickly be a viable future concept for the further conversion towards “green” steel and finally a return to respect for co-determination. “Otherwise the conflict is programmed.”
Thyssenkrupp’s largest individual shareholder, the Krupp Foundation, welcomed the plans. The foundation said it supports decisions that contribute to the company’s sustainable development. “The foundation has great confidence in the board of directors led by Miguel López and remains convinced of the company’s potential to become competitive and dividend-paying again.” The foundation holds around 20 percent of the group.
The agreement was well received on the stock market, and stocks listed in the MDAX rose sharply.