Thyssenkrupp Shares Rise on Elevator-Deal Report

Date : 05/16/2019 @ 9:33AM
Source : Dow Jones News

Thyssenkrupp Shares Rise on Elevator-Deal Report

   By Nathan Allen 

Thyssenkrupp AG (TKA.XE) shares traded higher Thursday, extending a prolonged patch of volatility for the German conglomerate, after Reuters reported that Finnish rival Kone Oyj (KNEBV.HE) is considering a deal for its elevator unit.

The report of Kone's interest comes less than a week after Thyssenkrupp said it wants to spin off and list the unit, which could be valued at around 14 billion euros ($15.68 billion), abandoning previous plans to split the group in two.

Thyssenkrupp's strategic U-turn drove the stock up nearly 30% last Friday, but shares subsequently returned to trade around their prior level amid a slew of analyst downgrades, poor second-quarter results and a general selloff in equities.

Still, at 0754 GMT Thyssenkrupp had regained 3.2% to trade at EUR12.56, after climbing as high as EUR12.92 earlier in the day.

Speculation about some form of tie-up between Kone and Thyssenkrupp has circulated for several years without ever progressing to a concrete offer. German media has reported that Thyssenkrupp's largest shareholder, the Alfried Krupp Foundation, met with Kone shareholder Antti Herlin to discuss a deal as far back as 2016.

The current deliberations are also likely to prove abortive, according to Jefferies analyst Alan Spence. While a listing would provide a quick cash injection to bolster Thyssenkrupp's balance sheet and fund much-needed restructuring, a merger would likely become mired in antitrust proceedings, delaying any potential gains until at least 2021, Mr. Spence said.

Such a deal could produce significant cost savings and the two companies' portfolios are broadly complementary, despite some geographical overlap, the analyst said.


Write to Nathan Allen at


(END) Dow Jones Newswires

May 16, 2019 04:18 ET (08:18 GMT)

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