FLSmidth takes hold of smaller thyssenkrupp Mining

‘We will start immediately to drive the service business … harder than we believe TK has done’

Investors have bristled at FLSmidth management’s confirmation they are buying a smaller thyssenkrupp Mining (TK Mining) than what was flagged when the €280 million (cUS$318m) acquisition was announced in July last year.

On a call to mark the closure of the acquisition after regulatory and shareholder approvals, FLSmidth’s CEO indicated a significant reduction in TK Mining’s capital equipment, or “new build” revenue, was “exactly what we wanted” when the Danish company was contemplating the strategic union.

However, bank analysts on the call expressed surprise at an apparent 30% drop-off in TK Mining’s overall revenue run-rate, and the underlying profitability of the German business.

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