ThyssenKrupp AG fell the most in four months after the the Wall Street Journal reported that Germany’s biggest steelmaker failed to reach a deal on the sale of a steel plant with Brazilian steelmaker CSN.
ThyssenKrupp decreased as much as 7.2 percent to 16.1 euros, the steepest intraday decline since March 19. The stock was trading down 2.9 percent at 5:19 p.m. in Frankfurt, valuing the Essen, Germany-based company at 8.7 billion euros ($11.6 billion). Volume was 15 percent higher than the three-month daily average.
Cia. Siderurgica Nacional SA, Brazil’s third-largest steelmaker, and ThyssenKrupp failed to reach deal as they could’t agree on the price, the Wall Street Journal reported, citing people familiar with the matter. The deal fell through on a price difference of 385 million euros, the newspaper said. CSN emerged as the leading bidder for the German company’s Brazilian and U.S. steel plants, people with knowledge of the talks said in May.
ThyssenKrupp said today that the status of the negotiations hasn’t changed.
“We are in advanced negotiations with a leading bidder on the disposal of Steel Americas,” the unit that’s being sold, Stefan Ettwig, a spokesman at ThyssenKrupp, said by phone.
The 18-stock Bloomberg Europe Iron/Steel Index was little changed.
“If the speculation turns out to be correct, this will be a big setback for ThyssenKrupp,” Dirk Schlamp, a Frankfurt-based analyst at DZ Bank, wrote today in a note. “A failure to sell the steel assets could result in changes to current company strategy and would be clearly very negative.”
Bjoern Voss, an analyst at M.M.Warburg in Hamburg, lowered his rating on ThyssenKrupp shares to hold from buy, cutting his price target to 18 euros from 19 euros, citing other risks such as damage claims by German rail operators and price-fixing charges by the German cartel office.
He said the amount of 385 million euros “appears too low” to jeopardize a completion of the deal.