Steel

Sinking Thyssenkrupp needs more than a quick lift

21 November 2019

The German group’s shares fell after it cut its dividend. Selling its elevator unit will raise cash but leave a loss-making rump. With restructuring, the steel-to-ships maker could be worth much more than the current 7.5 bln euros, but boss Martina Merz faces an arduous climb.

ArcelorMittal win will help India heal debt wounds

15 November 2019

The country’s top court squashed a decision that threatened the steelmaker’s $6 bln bid for Essar through a new bankruptcy regime. The Mittal family’s homecoming can go ahead. It’s also a timely boost for lenders and investors needed to re-energise the flagging economy.

Buyout groups risk pricey scrum in German lifts

13 November 2019

Private equity managers are teaming up to buy Thyssenkrupp’s elevator unit, worth maybe 17 bln euros. That smacks of the ill-fated club deals that epitomised the last buyout boom, although the target’s stable cash flows makes a blowup unlikely. The biggest risk is overpaying.

ArcelorMittal gets convenient alibi for Italexit

8 November 2019

The steel giant wants to pull out from an agreed purchase of top European plant Ilva, blaming its loss of legal immunity. Quitting would spare ArcelorMittal the cost of upgrading the toxic site. That’s handy while global steel consumption is seen to be falling.

Big steel can reform its way to a longer life

30 September 2019

Rio Tinto will work with China's top producer to make steel greener. From Shell to BHP, resources firms are starting to tackle emissions churned out by oil, coal and the like, after they are sold. Such climate-friendly moves may also keep costs manageable, and an industry going.

Buyout offers exit if Thyssen gets stuck in lift

17 September 2019

Advent, Cinven and ADIA are lining up a bid for the German conglomerate’s elevators, the FT says. Thyssenkrupp may prefer trade rival Kone’s greater scope to offer an enticing price. But private equity has less to worry about from the EU’s recently reappointed antitrust chief.

Steel is awkward candidate for UK bailout largesse

31 May 2019

Thirty years after privatisation, a big chunk of Britain’s steel sector is going bust. The UK’s scope to offer support is less hopeless than it might appear, but the government would need to be convinced the industry is strategic and sustainable. Neither is obviously the case.

British Steel rescue loan is worst of bad options

21 May 2019

The UK’s second-largest steel producer may fail without state credit. Politicians can nationalise the company if they want to save thousands of jobs in a strategic sector. Or they could let the group go bust. The worst outcome is a short-term fix that bails out private owners.

Thyssenkrupp shoved into a panicky Plan B

10 May 2019

The German conglomerate is binning a split after weak operations hit its shares, Reuters reports. Spinning off its elevator business instead would help, especially if the EU blocks a merger of its steel arm. But Thyssenkrupp would still need to show it can cut bloated costs.

Oligarchs take U.S. sanctions risk in their stride

8 April 2019

The Russian owners of Evraz recently cut their stake below 50 pct, which offsets potential heat over their Kremlin links. That doesn’t mean fellow metal groups like Severstal need to follow suit. Still, Oleg Deripaska’s recent travails imply little cause for complacency.

Thyssenkrupp’s tarnished revamp is still needed

9 November 2018

Shares in the German industrial group plunged 10 pct after its latest profit warning. The bad news has further rattled investors already lukewarm about its planned breakup. Still, hiccups from unpicking an unwieldy conglomerate don’t make the strategy any less valid.

Metal tycoons test India’s new era of governance

26 October 2018

The Ruia family’s $7.4 bln offer to pull Essar Steel from bankruptcy is a brazen attempt to stop ArcelorMittal's winning bid. Creditors will do better with the former owners, but it makes a mockery of a young insolvency code and undermines the fight against errant moguls.

Thyssenkrupp gets half a breakup

27 September 2018

The German conglomerate’s shares surged on plans to split the company in two. Thyssenkrupp’s businesses are probably worth more apart than together. But the separation will take time, and one of the units will still have a stake in the other.

Ilva deal gives Italian business much-needed hope

7 September 2018

Rome has dropped its opposition to ArcelorMittal’s 4 bln euro swoop on Europe’s biggest steelworks. Scrapping Ilva would have been a victory for ideology over business logic and common sense. It’s an encouraging sign that the radical new government’s bark is less than its bite.

It’s time to take away Trump’s tariff toys

13 August 2018

Using steel duties to punish Turkey over a detained U.S. pastor is an abuse of the president's powers. While national security is a legitimate reason to restrict trade, doing so on a whim hurts America. Congress can be more muscular even if it's not yet prepared to rein Trump in.

South Korea offers cautionary Trump trade tale

13 August 2018

Seoul dodged U.S. steel tariffs by agreeing to a quota. The limit, however, was then applied retroactively and prevented exemptions. American manufacturers are now cut off from materials. EU President Jean-Claude Juncker and others will have to keep a close eye on the fine print.

Glencore risks writ large in balance sheet caution

8 August 2018

The $60 bln commodities giant only narrowly missed first-half EBITDA forecasts, despite a slew of Congo and U.S. subpoena-related woes. Given its swashbuckling image, investors might have expected more of a splash. The fact they got deleveraging instead flags the group’s concern.

CEO exit is game changer for ThyssenKrupp

6 July 2018

Heinrich Hiesinger offered to quit the German conglomerate days after clinching an underwhelming steel JV with Tata. His long tenure and advocacy of the group’s conglomerate structure made him ill-suited to the action ThyssenKrupp needs. His replacement should be more radical.

Steel pact lets Thyssen/Tata tackle wider problems

2 July 2018

Tweaking the terms of their September joint venture gives the German steelmaker a bigger share of a future IPO. It could have driven a harder bargain, but Tata had limited wiggle room. Besides, ThyssenKrupp needed a deal to kickstart its own much-needed overhaul.

ThyssenKrupp can forge better steel deal with Tata

14 June 2018

The German group has outperformed its Indian rival since they agreed a European steel joint venture last year, and now produces more than twice as much EBITDA. Tata could pay cash or give up dividends to close the gap. Walking away from the hefty synergies would be too painful.