March 26, 2018 / 8:54 AM / a year ago

Kloeckner & Co confirms interest in Thyssenkrupp Materials Services

DUESSELDORF/FRANKFURT, Germany (Reuters) - German metals distributor Kloeckner & Co (KCOGn.DE) on Monday said it continued to be interested in Materials Services, Thyssenkrupp’s largest division by sales, further raising expectations for a sale.

A logo of ThyssenKrupp AG is pictured outside the ThyssenKrupp headquarters in Essen, November 23, 2017. REUTERS/Thilo Schmuelgen

CEO Gisbert Ruehl in late February said Kloeckner would take a look at the Materials Services unit, which accounts for almost a third of Thyssenkrupp’s group sales, adding that no talks were currently being held on the matter.

He also said the group would likely require a partner to enter into a deal.

“I gladly confirm that these statements are still valid,” the Kloeckner & Co spokesman said, responding to a report in German business daily Handelsblatt that Thyssenkrupp will likely sell Materials Services.

Analysts have repeatedly pointed out that the division could be divested, citing Thyssenkrupp’s increased focus on its industrial goods business, which includes the company’s most profitable elevator division.

At 6.14 billion euros ($7.62 billion), Kloeckner & Co’s 2017 full-year sales accounted for less than half of those at Materials Services.

Thyssenkrupp's shares were up 1.7 percent at the top of Frankfurt's blue-chip index .GDAXI.

The group faces pressure from second-largest shareholder Cevian to break up its conglomerate structure further following a planned combination of its European steel activities with those of Tata Steel (TISC.NS).

Thyssenkrupp’s management and supervisory boards will hold an annual strategy discussion in May and more changes to the group’s structure could follow if they made sense.

The company on Monday said that the due diligence process to create the steel joint venture was almost done, confirming the signing of the contract with Tata Steel was still planned to take place in early 2018, not specifying further.

($1 = 0.8056 euros)

Reporting by Tom Kaeckenhoff and Christoph Steitz; Editing by Ludwig Burger and Matthew Mpoke Bigg

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