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[Ferro-Alloys.com] Thyssenkrupp completed the sale of its elevator business for 17.2 billion euros (20.4 billion U.S. dollars) to a bidding consortium led by U.S. and British private equity firms Advent International and Cinven, the German steel giant announced on Friday.
"Divesting the elevator business with its more than 50,000 employees was a tough decision that was not easy for anyone, but it was indispensable in the interests of the whole group of companies," said Martina Merz, chief executive officer (CEO) of Thyssenkrupp.
The transaction would result in a "substantial reduction in debt to a net cash position and a significant increase in equity," Thyssenkrupp announced.
In the fiscal year 2018/2019, Thyssenkrupp's elevator business had generated almost 20 percent of total revenues and was by far the company's most profitable business unit, achieving an adjusted earnings before interest and taxes (EBIT) of 907 million euros.
In September last year, Thyssenkrupp was downgraded from the German top tier DAX index of the country's 30 largest listed companies after being a founding member for 31 years and was replaced by aircraft engine manufacturer MTU Aero Engines.
Thyssenkrupp recently recorded losses of 948 million euros for the second quarter (Q2) of 2020. Compared to Q2 of the previous year, losses grew by almost 800 million euros.
"We are continuing to focus all our energies on substantially improving the performance of the remaining businesses," said Merz. The sale of the elevator business worth billions would provide "tailwind for the transformation of Thyssenkrupp."
Source: Xinhua
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