Thyssenkrupp Considers Strategic Stake Sale in Rothe Erde Amid Valuation Concerns
FRANKFURT/ESSEN – Thyssenkrupp AG is holding preliminary discussions regarding the potential sale of an approximate 30% stake in its Rothe Erde business, a key producer of large-diameter bearings for wind turbines, construction, and mining equipment, according to sources familiar with the matter. The deliberations come as the diversified industrial group continues to streamline its portfolio under pressure from shareholders to improve returns and narrow the discount at which its shares trade relative to its sum-of-parts value.
Rothe Erde, with its strong position in specialized industrial bearings, represents a core but capital-intensive segment within Thyssenkrupp's components technology unit. A partial divestment could attract strategic partners from the engineering or renewable energy sectors, as well as financial investors seeking exposure to infrastructure and energy transition markets. Proceeds from any transaction are likely to be earmarked for debt reduction or reinvestment into higher-growth areas of Thyssenkrupp's sprawling business, which spans from steel to submarine construction.
"This isn't just an asset sale; it's a strategic calibration," said Klaus Weber, a Frankfurt-based industrial analyst. "Thyssenkrupp is essentially testing the market to crystallize value for a prized asset while potentially bringing in a partner to share the burden of future capital expenditure. The valuation achieved will be a crucial benchmark for the entire components division."
The move underscores the ongoing challenge for Europe's legacy industrials in convincing the market of their intrinsic worth. Despite operational improvements, Thyssenkrupp's market capitalization has long lagged analyst estimates of its breakup value. A transparent, competitive process for a stake in Rothe Erde could help bridge that perception gap.
Market Reactions & Commentary
Michael Reinhardt, Portfolio Manager at NordAsset GmbH: "A sensible move. It unlocks hidden value and provides capital flexibility without surrendering control. The key is finding a partner that brings more than just cash—technology or market access would be ideal."
Dr. Anja Schmidt, Industrial Strategy Consultant: "This is a half-measure. Thyssenkrupp's chronic undervaluation stems from its bewildering complexity. They should be considering a full spin-off of Rothe Erde or even more radical portfolio surgery, not just selling a slice. This feels like management tinkering at the edges."
Thomas "Tom" Bauer, Retired Mechanical Engineer & Small Shareholder: "Rothe Erde is engineering excellence! It's the crown jewel. Selling any part of it feels like a betrayal of the company's industrial heritage. They're mortgaging the future for short-term balance sheet fixes."
Priya Sharma, Equity Analyst at Global Insight Partners: "The market will watch the buyer profile closely. A strategic industrial buyer could imply a higher valuation and synergies, boosting sentiment for the remaining stake. A private equity buyer might suggest pure financial engineering."
Formal sale documents are not yet in preparation, and the company has declined to comment on what it termed "market speculation." Any transaction would be subject to supervisory board approval and could take several months to finalize.