FRANKFURT AM MAIN, Germany — German heavy industry giant ThyssenKrupp said on Wednesday that it had agreed to sell its Brazilian CSA steel mill to the Ternium group for 1.5 billion euros ($1.57 billion), ending its loss-making “Steel Americas” adventure.
The deal comes as ThyssenKrupp shifts away from its traditional steel business, which has been battered by low prices, to focus on making industrial goods such as elevators, submarines and car parts.
“With the sale of CSA, we are parting fully with Steel Americas. This is an important milestone in the transformation of ThyssenKrupp,” CEO Heinrich Hiesinger said.
The Luxembourg-based Ternium group’s acquisition of the steel mill, still subject to regulatory approval, is expected to be completed by late September.
ThyssenKrupp had been trying for years to rid itself of the troubled Brazilian mill after already ditching its other steel plant in the Americas, the unprofitable Alabama steelworks, in 2014. Analysts welcomed the move and said money from the Brazilian sale would help ThyssenKrupp pay down its debts.
“With the disposal, an important milestone in the transformation of the company can be reached and the very negative chapter ‘Steel Americas’ can be closed,” DZ Bank analyst Dirk Schlamp said.
Taking into account the proceeds from the Brazilian sale, ThyssenKrupp said the net loss from the ill-fated attempt to expand its steel activities into the Americas still stood at around eight billion euros ($8.40 billion). Earlier this month, the group announced it had swung back to profit in the first fiscal quarter, mainly thanks to elevator sales, in what Hiesinger hailed as proof that the new strategy was working.
The firm reported net income of eight million euros ($8.40 million) between October and December, recovering from a 23 million euro ($24.18 million) loss over the same period a year earlier.
Copyright Agence France-Presse, 2017