ZCZC
BCN-24
GERMANY-MARKET-STOCKS-THYSSENKRUPP
German giant Thyssenkrupp relinquishes blue-chip status
FRANKFURT AM MAIN, Sept 5, 2019 (BSS/AFP) – Struggling German industrial
conglomerate Thyssenkrupp is set for ejection from the DAX index of 30
leading shares on the Frankfurt stock exchange, operator Deutsche Boerse said
late Wednesday.
The historic Essen-based giant’s shoes will be filled from September 23 by
MTU Aero Engines, which makes components for aircraft motors.
Thyssen was a DAX member from the index’s creation in 1987, becoming even
weightier after a merger with rival Krupp in 1999.
But its shares have plummeted more than 60 percent since 2018, with the
European Commission’s decision to block its merger with India’s Tata in June
worsening the slide.
“There’s no question we’re disappointed to leave the DAX,” chief executive
Guido Kerkhoff said in a statement to AFP.
“We’re now looking to the future, it’s important to reconfigure the
business in a more profitable way to win back investors’ trust.”
Metzler bank analyst Pascal Spano judged that Thyssenkrupp “is currently
only a shadow of its former self”.
One sign of that is the fact that its elevators division, one of its slew
of products from submarines to construction materials, is valued more highly
than the business as a whole, at 14 billion euros ($15.4 billion).
While Thyssenkrupp has dropped plans to split in two, it remains set on
listing separately the highly profitable lifts unit.
For MTU, the switch comes after a meteoric rise, multiplying its market
value by 20 since the 2008-09 financial crisis.
Supplying parts for airliners and military aircraft like the Eurofighter
or A400M transport, its market capitalisation is now more than 13 billion
euros, around double Thyssenkrupp’s and also larger than airline group
Lufthansa.
MTU, detached from carmaker BMW after World War II, has been listed since
2005.
BSS/AFP/HR/1500