Thyssenkrupp Accelerates Deconglomeration: HKM Sold, Steel Revalued, and Elevator Stake Worth Billions

Thyssenkrupp exits HKM steel JV, boosts steel book value by €600M, and eyes multi-billion payout from TK Elevator-Kone merger. Shares up 48% since March.

Thyssenkrupp is shedding its industrial skin piece by piece. Within weeks, the German conglomerate has struck a deal to exit a major steel joint venture, raised the book value of its struggling steel division by €600 million, and positioned itself for a multi-billion euro payout from the merger of its elevator business with Kone. The shares have climbed roughly 48% since their March low and closed at €10.76 on Thursday, though they slipped slightly on the week.

The most immediate shift comes in Duisburg, where Thyssenkrupp Steel will hand over its 50% stake in the Hüttenwerke Krupp Mannesmann (HKM) joint venture to Salzgitter on June 1. HKM is currently owned 30% by Salzgitter and 20% by French tube maker Vallourec, meaning the deal will give Salzgitter an 80% controlling interest. Thyssenkrupp has secured a supply contract from HKM running until the end of 2028, trimmed from the original 2032 term as part of the financial separation. CEO Miguel López, who is reshaping the group into a financial holding, called the move another structural knot untied.

The steel division itself just got a valuation lift. CFO Axel Hamann raised the book value from €2.4 billion to €3 billion, citing three developments: a tariff agreement that will cut or outsource 11,000 jobs, the HKM exit, and pending EU import restrictions. The timing is awkward — talks with Jindal Steel International about a potential stake purchase have been paused — but the revaluation signals confidence that the division’s worst may be over.

From July 1, the EU will slash duty-free steel import quotas by 47% to 18.3 million tonnes annually, with a 50% tariff on anything above that. For European mills such as Thyssenkrupp, the measure offers a tangible competitive edge at home. Cheap imports had already forced temporary production stoppages at plants in Gelsenkirchen and Isbergues, France, affecting about 1,200 workers.

The half-year numbers paint a split picture. Group order intake surged 32% to €10.6 billion in the second quarter, powered by a blockbuster performance at Marine Systems. Revenue slipped 2% to €8.4 billion, hammered by lower steel prices and weak automotive demand. The net loss for the first six months came in at €345 million. Thyssenkrupp trimmed its full-year revenue guidance to a range of -3% to 0%, down from the previous -2% to +1%, but left targets for adjusted EBIT, free cash flow and net income unchanged. Equity stood at €10.3 billion at the end of March, with available liquidity of €4.6 billion.

Cost discipline is delivering at the operating line, however. Adjusted EBIT rose to €198 million in the second quarter despite the revenue decline. The flip side is that the restructuring is still burning cash: the group expects a free cash flow outflow of up to €600 million for the year to September 2026.

The most significant value catalyst sits outside the core businesses. Thyssenkrupp still holds just over 16% of TK Elevator, which the planned Kone deal values at €29.4 billion. Under the terms, Thyssenkrupp would receive €810 million in cash and up to €2.46 billion in new Kone shares, giving it a stake in the combined entity. Regulatory approvals are still pending, with completion not expected before the second quarter of 2027. Until then, the holding remains a paper valuation driver rather than a near-term cash injection.

Marine Systems offers steady reassurance. With an order backlog of €20 billion, the division benefits from sustained defence spending and provides a counterweight to the volatility in steel. Analysts see additional levers in the pipeline. JPMorgan raised its price target to €11.80, keeping a "Neutral" rating, as Dominic O'Kane pointed to the higher value of the elevator stake. Jefferies holds a €13 target, while Citigroup's Ephrem Ravi flags the planned spin-off of Material Services and the eventual monetisation of the elevator stake as further share-price catalysts. A potential large contract from Canada also remains on the table, adding to the series of decisions due in the coming weeks.