London (Platts)--6May2011/758 am EDT/1158 GMT

German steel group ThyssenKrupp's executive board agreed Thursday to a Eur10 billion ($14.5 billion) shakeup of its business portfolio, potentially separating its stainless steel business and identifying US iron caster ThyssenKrupp Waupaca among units set for divestment.

The company decided "on extensive measures regarding the further strategic development of the group," and agreed to concentrate on engineering and automotive sectors, said a company statement released late Thursday in Europe.

"Current and prospective divestments within the context of portfolio alignment agreed upon by the executive board approximate Eur10 billion and 35,000 employees--based on the previous fiscal year," it said.

The executive board will present the plan and propose a stronger focus within automotive business activities to its supervisory board for approval on May 13, the company said.

"ThyssenKrupp wants to focus the portfolio and discard business activities for which alternative strategic options are more suitable in order to strengthen the financial base of the group and to provide additional flexibility for the expansion into strategically promising business activities," it said.

A divestment of ThyssenKrupp Waupaca, the springs and stabilizers business activities as well as Brazilian Automotive Systems and the separation of ThyssenKrupp Tailored Blanks "within the context of a best owner process," is planned. ThyssenKrupp Waupaca has sales of almost $900 million and around 3,000 employees, it said.

It also proposes bundling the chassis business activities of the Bilstein Group and Presta Steering, which it said will result in a Eur2.2 billion revenue provider of full chassis services with nearly 6,500 employees.

The current divestment of ThyssenKrupp Metal Forming, ThyssenKrupp Xervon and implementing a strategic partnership between Abu Dhabi Mar and ThyssenKrupp Marine Systems is ongoing, it said.

STAINLESS OPTIONS OUTSIDE GROUP

The executive board said it has decided to support further development of its Stainless Global unit and "all options regarding the continuation of its business activities outside the group are to be investigated," it said.

The unit in the last fiscal year had sales of Eur5.9 billion and more than 11,000 employees.

"The separation from ThyssenKrupp will result in an independent European market and quality leader within the stainless steel industry, giving Stainless the opportunity to develop its competitive position with greater flexibility--also with regard to potential strategic partnerships," it said.

"This will also result in more potential for additional structural improvements and cost savings," ThyssenKrupp added.

The decision comes after steel producer ArcelorMittal earlier this year won approval for a spinoff of its own stainless and specialty steels activities into new company Aperam.

--Hector Forster, hector_forster@platts.com

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