After abandoning a European merger deal with India’s Tata Steel, Thyssenkrupp is reportedly looking for partners for steel operations, said Guido Kerkhoff, Chief Executive of Thyssenkrupp.

As per trusted sources, Kerkhoff abandoned a restructuring strategy on Friday, in which the merger had a significant part, and committed instead to convert the steel-to-submarines group into a holding company and list its lucrative elevators business.

Since then, he has also agreed on a deal with labor unions for the new plan, which anticipates 6,000 job cuts that account for 4% of the Thyssenkrupp workforce. The blueprint of the deal is set to reach the supervisory board vote on May 21, cited sources.

According to sources familiar with the matter, on account of opposition from the European Union regulators, Thyssenkrupp ditched the long-planned merger of its steel manufacturing business with Tata Steel’s European operations, which could have formed the region’s No.2 producer after ArcelorMittal. 

The company is seeking other merging options for its steel business, Kerkhoff said. He further stated that with the present attitude of the European Commission, he doesn’t see the chances of bigger mergers. The company will therefore remain the majority shareholder, he added.

The German multinational, which had cautioned it would record negative cash flow this year, is looking for a financial shot in the division from the partial float of its elevators business, cited credible sources.

Thyssenkrupp will get started on that as soon as possible and then look for the right moment, Kerkhoff added.

When asked whether investors can expect a special dividend from the float’s profits, Kerkhoff said that the company wants to strengthen its balance sheet to gain more room for maneuver on the restructuring, which is a high priority.

Activist stakeholders have been demanding Thyssenkrupp to monetize its elevators business, which is estimated to be worth around 14 billion euros, two times the market capitalization of the parent company, reported sources.

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