ThyssenKrupp ship joint venture runs aground

German steel group ThyssenKrupp said on Friday that talks to create a broad joint venture with Abu Dhabi MAR had broken down, a setback for the German company's plans to reduce debt.

ThyssenKrupp ship joint venture runs aground
Photo: DPA

“Following two years of amicable talks and negotiations exploring the joint-venture both ThyssenKrupp Marine Systems and Abu Dhabi MAR have agreed to cease their efforts to form the envisaged joint-venture around the naval and non-naval shipbuilding business of Blohm+Voss in Hamburg,” a statement said.

ThyssenKrupp wanted to spin off its Blohm+Voss unit into the joint venture but the talks will now focus on civilian shipbuilding activites run by another company, HDW Gaarden in Kiel, northern Germany, it added.

The German group said it would continue to search for someone to buy civilian activities owned by Blohm+Voss.

“ThyssenKrupp Marine Systems will concentrate in the future on military shipbuilding,” the statement said.

ThyssenKrupp has launched a restrucuturing programme expected to result in the sale of activites which generate one-quarter of its current total sales by 2012, and the elimination of 35,000 jobs.

That would represent the sale of some 10 billion euros ($14.5 billion) in assets. ThyssenKrupp shares were hammered in morning trading on the Frankfurt stock exchange, losing 1.80 percent to 35.19 euros while the DAX index was essentially flat overall.


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German steel giant rejects ‘high cost’ state support

German industrial giant Thyssenkrupp on Friday rejected state participation to support it during the pandemic, an option favoured by unions but judged too costly by management.

German steel giant rejects 'high cost' state support
Thyssenkrupp's offices in Duisberg. Photo: Ina Fassbender / dpa / AFP
“State participation off the table,” Klaus Keysberg, the group's financial director, told the German daily Rheinische Post on Friday.
Keysberg blamed “high costs” in the long term of government assistance, “due to the interest payments and the terms of repayment.”
Already weakened by years of cut-price competition from China in the steel industry, Thyssenkrupp has further struggled with the effects of the pandemic that caused business activity to plunge.
The company said in mid-November it would cut an additional 5,000 jobs as part of its restructuring plan, bringing the total to nearly 11,000, to be spread out over several years.
Thyssenkrupp chief executive Martina Merz has not ruled out state assistance.
The powerful IG Metall union had organised rallies in October to demand a rescue plan from Berlin.
But the government was never enthusiastic, despite their acquisition of stakes in the airline Lufthansa and tour operator TUI, which also had business ravaged by Covid-19.
“I don't believe that nationalisation is the right response at the moment,” Germany's Economy Minister Peter Altmaier said in October on Thyssenkrupp.   
But national and regional governments favour more traditional aid structures, such as subsidies, or moves to convert to production of so-called green steel.
Discussions will continue to find alternatives.
A takeover of Thyssenkrupp's steel activities is still on the cards. British steel giant Liberty, founded by industrialist Sanjeev Gupta, launched a takeover bid in October.
Discussions are also underway with Sweden's SSAB and India's Tata Steel.
An alliance with fellow German steelmaker Salzgitter to create a national steel champion is also being considered. But these options won't be decided until “spring 2021”, Thyssenkrupp said.