Reliance Steel & Aluminum Co logo

RS - Reliance Steel & Aluminum Co News Story

$170.56 -1.9  -1.1%

Last Trade - 14/05/21

Sector
Basic Materials
Size
Large Cap
Market Cap £7.71bn
Enterprise Value £8.34bn
Revenue £6.44bn
Position in Universe 894th / 6846

UPDATE 1-Kloeckner CEO says parts of Thyssenkrupp Materials would be good fit

Wed 25th October, 2017 1:51pm
* Analysts expect Thyssenkrupp might put unit up for sale 
    * Unit is twice as large as Kloeckner & Co 
    * Kloeckner shares down 5.5 pct after Q3 results 
 
 (Adds CEO quote, details on M&A, Thyssenkrupp, shares) 
    FRANKFURT/DUESSELDORF, Oct 25 (Reuters) - German steel 
distributor Kloeckner & Co  KCOGn.DE  sees parts of 
Thyssenkrupp's  TKAG.DE  Materials Services unit as a good 
strategic fit, but has not been approached about buying some of 
its assets, its chief executive said. 
    Analysts expect that Thyssenkrupp could at some point decide 
to sell its Materials Services business, which made 11.9 billion 
euros ($14 billion) of sales in its 2015/2016 fiscal year, more 
than twice the 5.7 billion Kloeckner generated in 2016. 
    "The unit is twice as big compared to our company," 
Kloeckner CEO Gisbert Ruehl told journalists after presenting 
third-quarter results on Wednesday. "But it's certainly clear 
that it could be interesting for us in some way." 
    About two thirds of Materials Services' sales, or 7.7 
billion euros, come from Thyssenkrupp's materials distribution 
business, whose rivals include Kloeckner, Salzgitter  SZGG.DE  
and U.S.-listed Reliance Steel & Aluminum  RS.N . 
    Thyssenkrupp declined to comment on Ruehl's remarks. 
    Analysts expect that as Thyssenkrupp plans to merge its 
European steel operations with those of Tata Steel  TISC.N , 
Materials Services will no longer be part of Thyssen's core 
business and might be put up for sale at some point. 
    Last month, Thyssenkrupp CEO Heinrich Hiesinger said the 
group was in no hurry to make any strategic decisions with 
regard to its Materials Services unit, adding it was currently 
focused on the steel tie-up with Tata Steel. 
    Both groups, which are also Kloeckner & Co's two biggest 
suppliers of flat steel, last month announced plans to merge 
their European steel operations to create the continent's 
second-largest player after ArcelorMittal  MT.AS .  urn:newsml:reuters.com:*:nL5N1M10F1 
    Ruehl said that any form of consolidation was good for the 
sector. "We expect our good working relationship to continue 
going forward," he said. 
    Shares in Kloeckner were down 5.5 percent, the biggest 
decliners among German smallcaps  .PL.SDAXI , after its results 
on Wednesday, with analysts pointing to the prospect of weak 
fourth-quarter core earnings after the group kept its outlook. 
    The firm still expects earnings before interest, tax, 
depreciation and amortisation (EBITDA) to grow by at least 10 
percent in 2017, which would bring it to at least 216 million 
euros. 
    After nine months, EBITDA already stood at 187 million 
euros, suggesting the group might earn less than 30 million in 
the last three months of 2017, far below the 44 million Thomson 
Reuters I/B/E/S estimate. 
    ($1 = 0.8496 euros) 
 
 (Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by 
Susan Fenton) 
 ((christoph.steitz@thomsonreuters.com; +49 69 7565 1269; 
Reuters Messaging: 
christoph.steitz.thomsonreuters.com@reuters.net)) 
 
Keywords: KLOECK & CO RESULTS/M&A
© Stockopedia 2021, Refinitiv, Share Data Services.
This site cannot substitute for professional investment advice or independent factual verification. To use it, you must accept our Terms of Use, Privacy and Disclaimer policies.