Thyssenkrupp stock moved higher by about 4% on Wednesday following a report that the company is considering a separation of its materials trading division, Thyssenkrupp Materials Services (MX). The report said the move would form part of a wider restructuring under CEO Miguel Lopez and could see MX spun off, listed, or sold later this year.
MX generated 11.4 billion euros in revenue last year and contributed more than one-third of Thyssenkrupp's group sales. One option under consideration is a public listing as early as autumn, with the company assessing stand-alone alternatives to prepare the unit for capital markets.
In a statement attributed to the company, Thyssenkrupp said MX was "well on track" to become capital-market ready and reiterated that it was pursuing a stand-alone solution. The timing for any divestment and possible changes to the unit's legal form have not been finalized, the report added.
Among the structural options under review is converting MX into a Kommanditgesellschaft auf Aktien (KGaA) legal form. That structure would allow the parent to retain control even if it were to sell a majority stake in the unit. Company executives continue to hold discussions and have not reached final decisions, according to the report.
Thyssenkrupp also provided a direct statement on the market prospects for Materials Services: "We are confident that Materials Services can be successfully brought to the capital market - even in a challenging environment. As with any planned transaction, the exact timing will depend on market conditions," the company said.
A successful separation or sale is likely to be contingent on performance improvements in MX's second fiscal quarter, which ends in March. MX operates across metals and raw materials trading and maintains warehousing capabilities. The unit regards the U.S. as a key market where consolidation among rivals is accelerating.
Within the U.S. steel service provider ranking, MX is placed fourth behind Reliance, Ryerson/Olympic Steel and Kloeckner. On consolidation dynamics, the company noted: "We see potential for consolidation in the market, but we do not view this potential as a risk, but rather as an opportunity for Materials Services."
The report referenced valuation context from recent industry activity. Based on Worthington Steel's proposed acquisition of Kloeckner at 8.5 times core profit, MX could be valued at around 2 billion euros under comparable metrics, the report said.
This development will be watched closely by investors and industry participants given MX's significant contribution to group revenue and its exposure to metals trading and warehousing markets. Any decision on listing, sale, or legal conversion would hinge on market conditions and the unit's near-term operational performance.