Germany's Thyssenkrupp to divest stake in Indian arm to local partners

German conglomerate Thyssenkrupp has initiated the process to divest its stake in the Indian arm, Thyssenkrupp Industries India (tkII) to co-shareholders, Paharpur Cooling Towers and Protos Engineering.

In a statement on Wednesday, tkII announced that a binding agreement had been executed on January 22, 2024, to initiate the process to divest Thyssenkrupp’s entire stake in tkII to Paharpur Cooling Towers and Protos Engineering, long-standing co-shareholders of tkII. It was expected to be closed in the second quarter of the current calendar year upon conclusion of the regulatory processes.

Thyssenkrupp approximately has a 55 per cent interest in tkII. The divestment was in line with a refocusing of the German conglomerate’s portfolio. tkII is a partner for engineering, construction and service of industrial plants and systems in mining, cement, energy, boilers and sugar.

The statement said that it is “intended and envisaged” that Thyssenkrupp Polysius and tkII would remain close cooperating partners.

In order to ensure seamless business continuity, tkII cement division would continue to have access to core technologies of Thyssenkrupp’s business unit Polysius through a perpetual license agreement with Thyssenkrupp Polysius GmbH, it added.

The agreement would enable tkII to continue to provide new-build cement plants and equipment and services to all clients across India, Bangladesh and Nepal. tkII, would in turn, continue to provide Thyssenkrupp Polysius with engineering and manufacturing support globally.

“While there is a change in the shareholding, the approach to the market and the way we serve our cement customers in India through tkII remains unchanged. tkII will continue to conduct its large and widespread non-cement business (in the field of mining, energy, boilers and sugar and related services) as-is, based on the technology and knowhow already existing at tkII,” the statement said.

Commenting, Pablo Hofelich, chairman of tkII and chief executive officer of Thyssenkrupp Polysius said “With this step, the shareholding structure is changing for tkII but with continued commitment and support of Polysius, as a licensor and supplier of critical components, our approach towards tkII cement customers, technology offerings, quality excellence that tkII is known for and overall approach towards industry remains unchanged.”

“While the terms of the agreement remain confidential, we see the new majority shareholders of tkII as the best owners to grow tkII in the future,” he added.

Post-closing of the deal, Paharpur Cooling Towers would be the majority shareholder of tkII.

Vikram Swarup and Gaurav Swarup, chairman and co-chairman respectively of Paharpur Cooling Towers Limited, said, “tkII is a highly successful and well-regarded entity when it comes to equipment and associated services for the cement, mining, energy and sugar sectors.”

“We are delighted to have reached an agreement with Thyssenkrupp in acquiring a leading shareholding at tkII.”

Vikram Swarup of Paharpur Cooling Towers and P N Kapadia of Protos India have been on the board of tkII for years.