Thyssenkrupp AG: Strategic Moves in Steel and Defence Amid a Positive Market Trajectory
Thyssenkrupp AG, a cornerstone of the German industrial landscape, continues to demonstrate its adaptability through a series of strategic developments that span both its core steel business and its growing presence in defence‑related manufacturing. The company’s recent activities—most notably a long‑term supply agreement with Stegra, negotiations to sell its steel unit to India’s Jindal Steel, and the prospective acquisition of a multi‑billion‑euro submarine contract—underscore a dual‑focus strategy designed to sustain profitability while navigating a rapidly changing geopolitical and market environment.
1. Securing a Steady Steel Supply Chain
In early January, the company announced a multi‑year contract with the former H2 Green Steel, now operating as Stegra. The agreement, signed with Thyssenkrupp Materials Processing Europe, will deliver significant volumes of non‑prime steel from Stegra’s plant in Boden. This partnership not only bolsters the company’s supply chain resilience but also aligns with Thyssenkrupp’s broader commitment to flexible, cost‑effective steel sourcing. By leveraging Stegra’s production capacity, Thyssenkrupp can mitigate price volatility and ensure a stable feedstock for its flat‑rolled and cast steel product lines.
2. Potential Sale of the Steel Unit to Jindal Steel
Concurrently, the company is in advanced negotiations to sell its steel division to the Indian conglomerate Jindal Steel. Should the transaction close, it would represent a significant strategic realignment, allowing Thyssenkrupp to refocus resources on high‑value sectors such as elevators, escalators, machine tools, and defence components. Analysts suggest that the sale could unlock substantial shareholder value, especially given the current market valuation of the company at a market cap of approximately €8.5 billion and a price‑to‑earnings ratio of 13.6.
3. A Multi‑Billion‑Euro Submarine Deal on the Horizon
While the steel business undergoes transformation, Thyssenkrupp’s Marine division appears poised for a landmark expansion. Reports indicate that a submarine contract valued in the billions of euros is nearing finalisation with the Indian Navy. This development dovetails with broader Indo‑German defence cooperation, as highlighted by the recent memorandum of understanding between German and Indian defence ministries during Chancellor Friedrich Merz’s visit to Ahmedabad. The submarine project could provide a robust revenue stream and strengthen Thyssenkrupp’s position as a leading provider of advanced naval technology.
4. Market Context and Share Performance
The German stock market’s medium‑cap index (MDAX) experienced a modest but consistent uptick during the first week of January, rising by 0.19 % to 32,227.28 points. Thyssenkrupp, listed on the Xetra exchange, closed at €10.29 on 8 January, with a 52‑week high of €13.35 recorded in October 2025. The company’s stock has therefore shown relative stability, maintaining a market valuation that reflects its diversified portfolio and ongoing strategic initiatives.
5. Outlook
The convergence of a secured steel supply chain, potential divestiture of a legacy unit, and a high‑profile defence contract positions Thyssenkrupp to capitalize on both domestic and international growth opportunities. While the sale of its steel arm could signal a shift towards higher‑margin businesses, the submarine deal underscores the company’s continued relevance in the global defence market. Investors will likely monitor how these moves affect the company’s earnings trajectory and capital allocation strategy in the coming quarters.
This article synthesises recent developments from multiple reputable sources, providing a comprehensive view of Thyssenkrupp AG’s strategic direction and market positioning.
