Thyssenkrupp’s Two-Front Battle: Tariff Shield Rises as Jindal Circles the Steel Unit

Thyssenkrupp advances dual-track restructuring with Jindal Steel due diligence, Materials Services spin-off, and potential TK Elevator IPO, as EU tariffs and cost hedging offer relief.

The communications blackout at Thyssenkrupp remains firmly in place until the half-year numbers land on May 12, but the machinery behind the curtain is running at full throttle. Management is pushing forward with a dual-track restructuring that could fundamentally reshape the industrial conglomerate, even as the market braces for a grim set of interim results.

A New Suitor Emerges for Steel

The abrupt exit of Czech investor Daniel Kretinsky last autumn left a gaping hole in Thyssenkrupp’s plans for its steel division. That void now appears to be filling. India’s Jindal Steel International is deep into a due diligence process, and market watchers expect a binding offer to materialise once the books are closed. The elephant in the room remains the multi-billion-euro pension liabilities, which are likely to dominate any negotiation.

While the steel talks grind on, the Essen-based group is accelerating the separation of its Materials Services trading arm. The target date is autumn of this year, with either an initial public offering or a demerger on the table. CFO Axel Hamann is already retooling the logistics chain with artificial intelligence, aiming to polish the division’s appeal for equity markets.

Hidden Value in the Elevator Business

One potential source of relief lies in Thyssenkrupp’s residual stake in TK Elevator, the former lift unit. The majority owners are weighing an IPO in the second half of the year that could value the business at up to €25 billion. For Thyssenkrupp, such a move would provide a significant cash injection to ease its debt burden and fund the broader restructuring effort.

Analysts at Jefferies, who reaffirmed their buy rating with a €13 price target, point to these undiscovered assets as a key reason for optimism. Tommaso Castello, the Jefferies analyst, argues that structural progress in the European steel industry is underway, even if geopolitical headwinds could delay a full recovery until 2027. On the cost front, Castello notes that Thyssenkrupp has energy expenses well hedged.

A Tariff Lifeline from Brussels

Operationally, the group continues to feel the heat from Asian imports. Production of electrical steel at the French site in Isbergues has been suspended entirely for the summer months. Relief, however, is on the way from Brussels. Starting in July, EU protective tariffs on steel imports will double to as much as 50 percent, giving the battered sector some breathing room to finance its green transition.

The stock has responded to the shifting landscape. After a prolonged slump, the shares have climbed 21 percent over the past month to €9.03, though they remain slightly in the red year-to-date. Castello sees further upside from current levels.

The Numbers That Matter

The market’s expectations for the half-year report due on May 12 are subdued. Analysts forecast revenue of roughly €8.1 billion for the latest quarter, with earnings per share collapsing to just €0.04 — a fraction of the €0.25 or so recorded a year earlier. For the full fiscal year, the consensus among ten analysts points to a loss of nearly €0.05 per share, a stark reversal from the prior year’s profitability.

Thyssenkrupp is now walking a tightrope between shrinking earnings and an expensive corporate overhaul. The May 12 numbers will provide the first hard evidence of how deep the restructuring costs have cut into operating results — and whether the turnaround plan has any room for error.