Thyssenkrupp's Strategic Portfolio Reshuffle Gains Momentum

Thyssenkrupp advances two major deals: preparing an IPO for its €11.4B Materials Services division while negotiating the sale of its steel business to reshape the conglomerate.

Thyssenkrupp is advancing two major strategic transactions that could reshape the industrial conglomerate. As confidential negotiations continue for the sale of its steel division, the company is simultaneously preparing for the potential market listing of its substantial materials distribution business.

Materials Services Division Eyes Independence

The group is actively evaluating strategic options for Thyssenkrupp Materials Services, its materials trading and services unit. According to internal sources, possibilities under consideration include a spin-off, an initial public offering (IPO), or an outright sale. A notable structural option being examined is conversion into a partnership limited by shares (KGaA), which could allow Thyssenkrupp to retain control even after a partial divestment.

Company insiders indicate an IPO could be feasible as early as this autumn. However, management has set a clear prerequisite: the division must demonstrate an improved operational performance in the current second fiscal quarter, which concludes at the end of March. "We are confident that Materials Services can be successfully brought to the capital market—even in a challenging environment," a company statement noted, adding that the precise timing would depend on prevailing market conditions.

Generating annual sales of €11.4 billion, Materials Services accounts for over one-third of the group's total revenue and employs more than 15,000 people. The division provides logistics and processing services for materials including steel and plastics. A transaction would exceed the scale of the recent IPO for Thyssenkrupp's marine systems unit, TKMS.

Parallel Negotiations for Steel Europe Sale Progress

In a separate but concurrent process, Thyssenkrupp is engaged in exclusive talks with Jindal Steel International regarding the sale of Thyssenkrupp Steel Europe. A comprehensive due diligence review is currently underway.

The group has recently achieved significant milestones paving the way for this transaction. These include concluding a collective bargaining agreement for the steel realignment in December 2025 and signing a term sheet with Salzgitter AG in February 2026. As part of this arrangement, Thyssenkrupp's shares in Hüttenwerke Krupp Mannesmann (HKM) are scheduled to transfer to Salzgitter on June 1, 2026.

On the operational front, Steel Europe is already supplying a more sustainable product. Starting in 2026, the division will provide its CO?-reduced "bluemint® recycled" steel to BMW for series production of the iX3, including for safety-critical components. This steel has a carbon footprint of 0.75 tonnes per tonne of hot-rolled coil, which is 1.35 tonnes less than conventional production methods.

Operational Performance and Group Transformation

For the first quarter of the 2025/26 fiscal year, Thyssenkrupp reported a slight improvement in adjusted EBIT to €211 million. Group sales declined by 8 percent to €7.2 billion, while order intake, as anticipated, fell to €7.7 billion. The comparison base for the prior-year quarter was unusually high due to major orders at TKMS.

The quarter concluded with a net loss of €334 million, primarily driven by restructuring expenses of €401 million at Steel Europe. The company's transformation into a financial holding structure, guided by its "ACES-2030" future model, is proceeding at pace.

Meanwhile, Thyssenkrupp Marine Systems (TKMS) is emerging as a key growth pillar. The defense subsidiary, which has been publicly listed since October 2025 and joined the MDAX index in December, holds a record order backlog of €18.7 billion. This includes the largest torpedo contract in the company's history, awarded by the German Navy. Thyssenkrupp retains a 51 percent stake in TKMS.

The group is scheduled to publish its half-year report on May 12, 2026. By that time, it will be clear whether Materials Services has met its performance target by the end of March, determining if CEO Miguel López can execute the next major portfolio move before the end of 2026.