October 30, 2019 / 9:57 AM / 20 days ago

Kloeckner & Co says no merger talks with Thyssenkrupp

FRANKFURT (Reuters) - German metals trader Kloeckner & Co (KCOGn.DE) is not in talks with larger rival Thyssenkrupp (TKAG.DE) about a tie-up, Kloeckner & Co’s chief executive said on Wednesday, quashing speculation about a deal in the near term.

FILE PHOTO: Gisbert Ruehl, CEO of German steel distributor Kloeckner & Co SE, poses for a picture at a hotel in Dusseldorf, Germany February 16, 2016. REUTERS/Wolfgang Rattay

Sources told Reuters in August that Thyssenkrupp and Kloeckner & Co were discussing future cooperation in materials trading, but were not working on a takeover of Kloeckner.

“There are currently no talks,” Gisbert Ruehl told journalists during a conference call following third-quarter results.

“And we don’t expect that there will be a significant change,” Ruehl said, adding Kloeckner & Co currently had “no big interest” in consolidation.

Ruehl said the group was more focused on fixing its own operational problems following a recent profit warning, adding it was in a wait-and-see mode with regard to Thyssenkrupp’s Materials Services division.

“Going forward, in principle, I would not rule anything out. But we have to see what the final strategy of Thyssen in the end is, which is, I think, at least currently not 100% clear,” Ruehl told analysts.

He said a merger of Kloeckner & Co and Thyssenkrupp Materials Services - Thyssenkrupp’s largest division by sales and about twice the size of its smaller peer - would bring both synergies and expenses.

It would also not be an easy task with regard to corporate culture, Ruehl added. “But honestly I think in the next foreseeable future this is, in my point of view, no issue anyhow.”

A spokesman for Thyssenkrupp declined to comment.

Shares in Kloeckner & Co were down 1.8% while Thyssenkrupp’s stock was down 3.3% following the news.

There has been speculation for years about a tie-up between Kloeckner & Co and Thyssenkrupp Materials Services, boosted recently by a major restructuring plan at Thyssenkrupp.

Additional reporting by Anneli Palmen in Duesseldorf; Editing by Thomas Escritt and Mark Potter

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