If you think about which companies in Germany made armaments and steel in the World Wars, near the top of the list would be Krupp, which merged with Thyssen. For generations, Thyssenkrupp has been one of the key industrial companies in Germany. The company has evolved over the years and is still a premier company involved in construction, engineering and service of industrial plants – essentially Thyssenkrupp helps any company around the world after the raw materials have been extracted from the earth and the next stage is to produce something from them. They have a long history and recently merged their European steel operations with Tata Steel in a 50/50 operation. Tata which is based in India owns a steel mill in the Netherlands which is close to Thyssenkrupp’s mill in Germany and it is believed money can be saved with a merger. If you been in an elevator you might see the Thyssenkrupp name.

In the world of the stock market sometimes being stand alone business is worth more to shareholders, sometimes conglomerates are worth more because they are diversified. Thyssenkrupp is a conglomerate and at the moment, the shares have not move upwards in 2 years even though the company continues to do well. Activist shareholders believe the sum of the parts would be worth more than combined and have pushed management in that direction. The pushing meant Heinrich Hiesinger the current Chief Executive submitted his resignation and the company will be restructured in some fashion keeping in mind the biggest shareholder is the Krupp Foundation.

Linking to dividend paying stocks, often times as shareholders you want the company to fully diversified in the operations it does. The company can control its destiny from raw materials to the goods and services it delivers. Sometimes this is worth more than the sum of its parts and sometimes some shareholders will call for outsourcing of some of the parts. There is no perfect answer and companies will and do go through the process on a consistent basis. In the same fashion, sometimes shareholders will worry about debt, sometimes they believe the company could carry more debt. Companies continue to balance the competing vision of where the stock will be in a few years. As dividend shareholders you want to ensure your company does not go to far on the pendulum.

There are more questions than answers, till the next time – to raising questions.