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Ad Hoc Releases, 2018-09-27, 04:00 PM

Disclosure of an inside information according to Article 17 MAR: thyssenkrupp plans to split group into two independent, listed companies

At an extraordinary meeting on Sunday, September 30, 2018, the Executive Board of thyssenkrupp AG will propose to the Supervisory Board that the Group be split into two much more focused and efficient companies. The capital goods and materials businesses shall be managed in future as independent, listed companies with direct access to the capital markets. The Management Board is convinced that this new structure will allow the businesses to develop better and concentrate on their strengths. Both companies will continue to use the name thyssenkrupp.

The separation into two companies will take the form of a spin-off. After the split, thyssenkrupp AG shareholders will hold two shares: one of the future thyssenkrupp Materials AG (formerly thyssenkrupp AG) and one of the new thyssenkrupp Industrials AG. Existing stockholders will continue to hold 100 percent of thyssenkrupp Materials AG and initially a clear majority of thyssenkrupp Industrials AG. The remaining stake will initially be held by thyssenkrupp Materials AG [1]. This will ensure an adequate capital base of thyssenkrupp Materials AG. Liabilities and pension obligations are allocated adequately to both companies. This shall provide both entities with a better capital base, giving them a good start.

Two companies with a clear profile and clear focus

The separation of the company into two independent companies shall follow a clear industrial logic:

thyssenkrupp Industrials will consist of three units: firstly the elevator business, secondly the automotive supplier business and thirdly core plant construction. The elevators remain unchanged in their current configuration. Components Technology will focus on the automotive business. The slewing (Bearings) and the forging business (Forged Technologies) will be spun off from the division. A new addition is the System Engineering division, which builds production lines for cars, for example, and is currently part of Industrial Solutions. We are thus bundling the automotive expertise. The third pillar of our industrial business will in future be the focused core plant construction. thyssenkrupp Industrials will therefore be a pure capital goods business.

The other part - thyssenkrupp Materials - will consist of the following units: Materials Services, the 50 percent interest in the future steel joint venture, the slewing bearings and forging businesses as well as the marine business. The result is a materials group that combines steel and stainless steel production, materials trading and steel-related processing, that has a leading market position in Europe and can also take advantage of consolidation opportunities from a position of strength.

The two companies will be of comparable size: Based on pro forma figures for fiscal 2016/17, thyssenkrupp Industrials AG would generate sales of around €16 billion with around 90,000 employees. thyssenkrupp Materials AG would have sales of around €18 billion with just under 40,000 employees.

Upon approval by the supervisory board, the details of the split, such as the transaction structure, the financing concept and the management models of both companies, will be developed in a diligent process. The split then has to be decided by the Annual Stockholders' Meeting of thyssenkrupp AG. This could take place in 12 to 18 months.

[1] figures excluding steel joint venture

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