Reuters: Private Equity: UPDATE 1-ThyssenKrupp finalising auto divestments -sources

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UPDATE 1-ThyssenKrupp finalising auto divestments -sources Apr 19th 2012, 14:10 FRANKFURT, April 18 | Thu Apr 19, 2012 10:10am EDT FRANKFURT, April 18 (Reuters) - ThyssenKrupp is putting the finishing touches to the sale of three businesses less than three months after the German steel group sold its stainless steel operation, people close to the matter said, as it continues its drive to cut debt. The businesses up for sale - its springs and stabilizer business, its iron-casting unit Waupaca and the Tailored Blanks unit - have total annual revenue of about 2.5 billion euros ($3.3 billion). The steelmaking conglomerate, whose business stretches from submarines to lifts, is in the throes of a radical restructuring that will see it shed non-core assets with overall revenues of 10 billion euros to slash debt. After the 2.7-billion-euro sale of stainless steel unit Inoxum to Finland's Outokumpu in late January and its sale of marine units to British buyout firm Star Capital, ThyssenKrupp is likely to announce further asset moves possibly as early as this month, one of the people said. A spokesman for ThyssenKrupp declined to provide details of ongoing divestment talks, saying only: "All processes are proceeding well." A person close to the transaction said ThyssenKrupp was set to sell the springs and stabilizers business, which was carved out of its unit Bilstein Group, to Italy's Sogefi for 100-200 million euros. He added that a private equity group, which he did not name, stood ready to scoop up the asset if talks with Sogefi failed at the last minute. Other private equity investors, such as U.S.-based KPS Capital Partners, recently dropped out of the race for the business, which has annual sales of 700 million euros, another source close to the matter said. Perella Weinberg is advising ThyssenKrupp on the deal, while Societe Generale is advising Sogefi. CHINESE PROBLEMS Separately, ThyssenKrupp appears to have chosen a preferred buyer for iron-casting unit Waupaca, which may fetch around $600 million, according to people familiar with the matter. Some private equity groups that were initially interested, like Apollo and Cerberus, have dropped out of the race, other sources said. Waupaca, a foundry business, has annual revenues of roughly 1.1 billion euros and has 3,000 workers at six plants in the United States. Bank of America Merrill Lynch is advising ThyssenKrupp on the deal. The sale of the third unit, Tailored Blanks, which has sales of 700 million euros and 900 employees worldwide is proving the most difficult, sources close to the transaction said. There is a Chinese bidder for the market leader in laser-welded blanks for the auto industry, but industry sources cautioned that the deal may be scuppered by the recent political crisis in China. "The big state-owned conglomerates will keep a low profile on M&A deals for a couple of months following the Bo Xilai affair," an adviser specialising in Chinese-European transactions said. The ouster of ambitious leadership contender Bo Xilai could sap China's will to tackle thorny problems by discouraging bold ideas from either the left or the right, especially ahead of a leadership succession. The companies and banks declined to comment. Link this Share this Digg this Email Reprints

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