Thyssenkrupp Walks Away from Jindal and Courts Berlin for TKMS as Restructuring Accelerates

Thyssenkrupp ditches Jindal steel sale talks, pivots to internal turnaround and Beijing mission; German government eyes state buy-in at naval shipyard TKMS, as defence growth diverges from struggling steel arm.

Thyssenkrupp is executing a two-pronged overhaul: ditching talks to sell a slice of its steel business to India's Jindal while simultaneously angling for state backing at its Kiel-based naval subsidiary TKMS. The diverging fortunes of the group's steel and defence arms have never been starker, with the former leaning on a costly internal turnaround and a high-level diplomatic trip to Beijing, and the latter poised to become a potential beneficiary of Berlin's rearmament drive.

Steel Pivot: No Jindal Deal, Beijing Mission Ahead

The company has formally pulled the plug on negotiations with Jindal, which had been on ice since late summer 2025. Management attributes the decision to improving market conditions for European steelmakers and progress in its own operational overhaul. Chief executive Miguel López reiterated that steel remains a core pillar of the strategy, but stressed that the focus now lies on strengthening the division through internal measures rather than a quick capital injection. "We are patient," he signalled, as stabilised supply chains and a leaner cost base have given the group more breathing room.

In a parallel move, a high-ranking delegation will travel to China next week alongside Germany's economy minister. The delegation includes not only Thyssenkrupp but also BASF and Siemens Energy. The agenda spans global steel overcapacity and access to green technologies – both critical to the group's decarbonisation plans. The outcome of that mission will be closely watched as a bellwether for Thyssenkrupp's ability to reduce costs without external sale proceeds.

Defence Ambitions: Berlin Eyes TKMS Stake

Meanwhile, the defence side of the business is attracting government interest. Defence minister Boris Pistorius is examining a state buy-in at TKMS modelled on Berlin's recent 40% stake in tank maker KNDS, valued at between €18 billion and €20 billion. After-hours trading saw defence stocks gain roughly 4.6% on speculation that the KNDS blueprint will be replicated for Germany's largest naval shipyard.

TKMS itself is in robust shape. Its order book stands at around €18.5 billion, and the unit plans to hire in the low four figures by the end of the decade. At the Wismar site alone, 1,500 new jobs are slated by 2029. That growth is a direct contrast to the rest of the conglomerate, which posted second-quarter revenue of €8.4 billion for fiscal 2025/2026 but ended with a net loss of €11 million.

Divestment Path: Materials Services Spin-Off Confirmed

Alongside the steel and defence moves, management is pressing ahead with the carved-out of materials distributor Materials Services. A spin-off has been confirmed, with the division reporting first-half revenue of €5.78 billion despite volumes falling from 2.3 million to 1.7 million tonnes. The unit is heavily exposed to the United States, which accounts for 39% of sales, and expects moderate full-year growth of 2% to 5%.

Stock Stretched as Investors Juggle Signals

Investors have reacted positively to the TKMS speculation, pushing Thyssenkrupp shares up more than 20% over the past 30 days and 11% year-to-date. The stock changed hands at €10.73 on Thursday, having earlier closed at €10.70, a 24% gain from its 52-week low of €7.15 but still 19% below the year-high of €13.24. The rally has left the shares technically overstretched: the relative strength index (RSI) has hit 82 on one measure and touched 87.4 on another, both firmly in overbought territory.

In a sign of institutional repositioning, asset manager Amundi trimmed its holding from 5.10% to 4.69% in May 2026 – likely a portfolio rebalancing rather than a strategic exit. The next clear catalyst will come from the China mission and any official word from Berlin on the TKMS stake, which together will determine whether the stock can sustain its momentum or retreat from frothy levels.