Vulcan Energy gets $106 million funding from German ministry
Shares of Vulcan Energy surged as much as 16.8% to a more than 18-month high on Tuesday.
German engineering firm Thyssenkrupp is nearing an agreement to sell its mining equipment division to Denmark’s FLSmidth, two people familiar with the matter said.
The deal, which the sources said could be announced as soon as this week, would bring to a close months of negotiations between the two companies, which said in January they were in talks.
Thyssenkrupp’s mining business, which competes with Finland’s Metso Outotec as well as Sweden’s Sandvik and Atlas Copco, is expected to fetch a “low triple-digit million euro” sum, one of the people said, implying more than 100 million euros ($118 million) but less than about 300 million.
Talks are continuing and there is still a risk they could fall apart, the people said.
Shares in Thyssenkrupp closed 1.7% higher, while FLSmidth stock was up 1.5%.
FLSmidth said it remained in negotiations with Thyssenkrupp concerning the acquisition of the latter’s mining business, adding the firms had reached the final stage of negotiations, but gave no indication of the likely timescale or value of any deal.
Thyssenkrupp declined to comment.
The sale would mark a further step in Thyssenkrupp Chief Executive Martina Merz’s efforts to streamline the German conglomerate’s structure by divesting underperforming businesses.
Thyssenkrupp, whose shares are up 4% year-to-date, has been struggling to come up with a convincing equity story after the sale of its prized elevators division last year.
The steel-to-submarines group has therefore formed a division called Multi Tracks, which consists of units Thyssenkrupp wants to close, restructure or sell.
Thyssenkrupp has not disclosed sales and profit figures for its mining division. Credit Suisse said that prior to the covid-19 pandemic annual sales at the unit were about 950 million euros ($1.1 billion), a level that has since declined.
“Service business opportunities have been overlooked for years … with no focus on designing equipment for service (e.g. proprietary spare parts) and no dedicated service sales people,” the investment bank wrote this week.
Apart from mining, Thyssenkrupp is also in advanced talks with potential buyers for its Italian stainless steel division AST, as well as its Infrastructure unit, which among other goods makes scaffolding and flood protection equipment, Merz said in May.
($1 = 0.8472 euros)
(By Arno Schuetze, Christoph Steitz, Stine Jacobsen and David Holmes)
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