Thyssenkrupp Sketches Outline of Future Corporate Structure

   By Nathan Allen

Thyssenkrupp AG (TKA.XE) on Tuesday released more details on how it plans to structure its operations once it splits up its various divisions into two separate companies.

The German conglomerate is in the process of spinning off its high-margin engineering businesses into a company called Thyssenkrupp Industrials, while its steelmaking operations will be bundled together with other less profitable units into an entity called Thyssenkrupp Materials.

Across both companies, Thyssenkrupp said it will reduce the number of board directorates and will combine certain central functions in an effort to streamline the decision-making process and allow for more nimble operations.

At Thyssenkrupp Industrials, which will house the elevator, automotive and plant-engineering businesses, the company plans to centralize some tasks such as recruitment and innovation.

However, the group plans to operate only a very lean corporate headquarters at Thyssenkrupp Materials, which encompasses a more disparate array of businesses including materials-services, steel production and marine systems.

"The businesses within Thyssenkrupp Materials differ widely in their requirements. There are fewer synergies here," the company said.

Thyssenkrupp said it doesn't expect substantial cost increases from the separation. Combined general-and-administrative costs for both companies in the 2021 fiscal year should be below 300 million euros ($339 million) compared with around EUR380 million in 2018.

There won't be any layoffs as a result of the separation, the company said.

Write to Nathan Allen at nathan.allen@dowjones.com

(END) Dow Jones Newswires

February 12, 2019 02:43 ET (07:43 GMT)

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