Via Financial Times

The Brazilian-backed private equity group 3G Capital has entered the race to buy the lifts business of Thyssenkrupp, in what would be a shift away from its multibillion-dollar investments in the consumer goods industry.

The group, famous for having often teamed up with Warren Buffett’s Berkshire Hathaway, is among several suitors that have submitted a bid for the German conglomerate’s most profitable business, said people familiar with the matter.

The sale of the elevator business could net Thyssenkrupp as much as $20bn, the people said. 

3G has been looking to strike a blockbuster investment after Kraft Heinz, which it controls along with Mr Buffett, failed to acquire Unilever in 2017. The private equity group currently has about $10bn to deploy and 3G’s investors, which include some of the world’s richest individuals, have been pushing it to make a big new bet. 

The decision to move away from the consumer goods sector comes after Kraft was beset with multibillion-dollar writedowns. Consumers have shifted from the packaged foods that at one point made Kraft a $118bn-market capitalisation behemoth in its industry. 

The poor performance of the Kraft investment — the company now has an equity market valuation of $40bn — has weighed on 3G and also cast a shadow over the group’s partnership with Mr Buffett. 

3G also teamed with Berkshire Hathaway to acquire Burger King, Tim Hortons and Popeyes, three fast food and coffee chains that are under the Restaurant Brands International holding group. RBI shares have performed significantly better than Kraft Heinz, more than doubling since the purchase of Tim Hortons in 2014 and valuing the company at $31bn. 

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With regards to the Thyssenkrupp lifts business, 3G is expected to join a crowded field including other private equity groups, sovereign wealth funds and publicly traded companies. Blackstone, Carlyle and the Canada Pension Plan Investment Board were preparing a joint bid for the unit, as was a rival group made up of Advent International, Cinven and the Abu Dhabi Investment Authority, the Financial Times reported last week. 

Bloomberg first reported on Tuesday that 3G had entered the race. Thyssenkrupp declined to comment. 3G did not respond to a request for comment. 

Thyssenkrupp has been pursuing a sale of the lifts business at the same time as also evaluating an initial public offering of the unit. The steel-to-submarines conglomerate is trying to raise cash to bring down debt and fund a restructuring of its operations, having been hit by the weakening German economy.

In September the company moved to accelerate its turnround plan, naming Martina Merz as its new chief executive.