IRON and STEEL
German industrial group Thyssenkrupp is in talks to buy metals trader Kloeckner & Co in a move to strengthen its steel business, Handelsblatt reported on Thursday citing sources familiar with the matter.
German industrial group Thyssenkrupp is in talks to buy metals distributor Kloeckner & Co in a move to strengthen its steel business, Handelsblatt reported on Thursday citing sources familiar with the matter.
CEO Guido Kerkhoff, under pressure after a fourth profit warning on his watch sent Thyssenkrupp shares to a 16-year low, has put a deal to buy Kloeckner at the centre of a turnaround plan he is working on, the newspaper reported.
"This objective is very concrete and has a good chance of being realised," one source familiar with the matter told Handelsblatt. Thyssenkrupp declined comment while no comment was immediately available from Kloeckner.
Kloeckner, whose shares are trading at decade lows under pressure from weakening industrial demand in Germany and abroad, has for months been the focus of speculation on a possible tie-up with Thyssenkrupp.
Gisbert Ruehl, Kloeckner's CEO, said in July he was open to playing a role in the consolidation of Thyssenkrupp's materials trading division, including taking a minority stake in it.
Thyssenkrupp in May unveiled a major restructuring, effectively looking for partners for its business divisions, including Materials Services where it could sell a minority stake to a strategic partner.
So far, Kerkhoff has struggled to gain traction on his strategic initiatives even as Thyssenkrupp's financial health deteriorated, narrowing the scope to be acquisitive and raising pressure to liquidate assets, say analysts.