Strategic Realignment Under Way

thyssenkrupp AG, one of Germany’s most venerable industrial conglomerates, has embarked on a transformative strategy to dismantle its traditional conglomerate model. On 27 May 2025, the Essen-based company formally declared that it will gradually restructure its core divisions, Materials Services and Automotive Technology, preparing them for entry into capital markets. The plan aims to enhance agility, improve performance transparency, and attract targeted third-party investments. The latest strategy is part of a broader effort to pivot from operational control to a portfolio-holding structure, where each division functions independently, with thyssenkrupp retaining significant ownership.

Materials Services in Investor Spotlight

The Materials Services division, a major arm within thyssenkrupp, is Germany’s largest steel and metal distributor with over 480 locations worldwide. This unit supplies a diverse range of raw materials and semi-finished products to industries ranging from construction to aerospace. As global demand for metals fluctuates, Materials Services has remained one of the most stable contributors to thyssenkrupp’s revenue. According to sources familiar with internal planning, the division may be floated on the Frankfurt Stock Exchange as early as 2026. With rivals like Klöckner & Co already publicly traded, this move would place thyssenkrupp’s distribution wing in a competitive league of listed industrial logistics firms.

Steel Europe’s Joint Venture Blueprint

This divestiture model draws heavily on thyssenkrupp’s recent arrangement with EP Corporate Group. The Steel Europe division, historically the company’s crown jewel, was first partially offloaded in 2024, with EPCG acquiring a 20% stake. By 2025, that partnership had evolved into a 50-50 joint venture. This restructuring alleviates the burden of full operational control while keeping the business strategically anchored. The Steel Europe deal is being viewed internally as a replicable blueprint for other divisions like Materials Services and Automotive Technology, striking a balance between governance and capital infusion.

CEO Miguel López’s Recalibration

Just weeks ago, thyssenkrupp CEO Miguel López had described Materials Services as a “core activity,” highlighting its stability and relevance. However, under increasing pressure from stakeholders to improve profitability and share value, López has recalibrated his stance. In his latest statement, he framed the separation and external investment as “essential steps to futureproof the group.” Analysts believe this pivot reflects a pragmatic response to an evolving industrial landscape, marked by digitalisation, supply chain volatility, and capital scarcity. López’s strategy is aligned with European peers like Siemens and ABB, who have also embraced leaner, investor-friendly structures.

Operational Autonomy & Market-Readiness

The plan entails converting each division into a standalone corporate entity with its own board, financials, and growth strategy. The goal is to attract targeted investors who bring not only capital but also technological and sector-specific expertise. thyssenkrupp insists it will retain a controlling interest in these new entities, suggesting an approach that balances decentralisation with oversight. For Materials Services, this means digitising supply chains, reducing physical inventory, and expanding value-added services like just-in-time logistics and customised processing. Preparing for IPO or investor entry will involve rigorous audits, leadership reshuffles, and legal restructuring to meet regulatory standards.

Labour Implications & Public Reaction

While the company has not publicly confirmed workforce reductions, German media reports have cited internal memos revealing plans to eliminate 1,500 jobs, 500 at the Essen headquarters and 1,000 across shared administrative roles. These revelations have drawn sharp criticism from North Rhine-Westphalia state leaders, who labelled the developments “dramatic.” Trade unions such as IG Metall are demanding negotiations and job guarantees. thyssenkrupp has pledged to manage the restructuring “responsibly and with transparency,” though tensions are likely to intensify as implementation begins. This is particularly sensitive in Germany, where industrial employment and corporate citizenship are deeply intertwined.

Automotive Technology’s Spin-Off Journey

Parallel to the Materials Services plan is the anticipated spin-off of thyssenkrupp Automotive Technology, which supplies powertrain components including camshafts, dampers, and electric steering systems to global automakers. With the auto sector transitioning towards electric vehicles and autonomous systems, the division must accelerate R&D and automation. By granting it operational independence, thyssenkrupp aims to unlock innovation and attract strategic partners from the mobility and software sectors. As with Materials Services, this division will also undergo legal and financial restructuring in preparation for possible IPO or partial acquisition.

thyssenkrupp’s Evolving Industrial Identity

With a history dating back to the 19th century Krupp steelworks, thyssenkrupp’s decision to relinquish operational control marks a symbolic end to its legacy as an all-encompassing industrial conglomerate. The company’s portfolio includes naval systems, elevator technologies (spun off in 2020 for $18.7 billion), and advanced engineering services. By adopting a holding company model with strategically diversified stakes, thyssenkrupp aims to mirror successful conglomerate-turned-holdings like General Electric or Hitachi. Experts believe this could help improve valuation, reduce corporate complexity, and better align each division with its respective global market.

Key Takeaways

• thyssenkrupp will prepare Materials Services & Automotive Technology for market entry and investor participation

• The group’s 50-50 joint venture with EP Corporate Group for Steel Europe serves as a restructuring model

• Reports indicate possible job cuts of 1,500 roles, sparking concern from unions and local government