FRANKFURT: Germany's ThyssenKrupp said on Tuesday it would close its railway equipment business, which was damaged by its involvement in a cartel, after failing to secure a sale of its wider railways and construction arm.
ThyssenKrupp said bids for the Railway/Construction division - which comprises ThyssenKrupp GfT Gleistechnik (railway equipment) and ThyssenKrupp Bautechnik (construction equipment) - were not high enough.
It said the closure of the unprofitable railway equipment activities would result in the partial closure and sale of sites and would affect up to 260 employees.
Germany's federal cartel office fined four companies - ThyssenKrupp, two units of Voestalpine and Germany's Vossloh - a combined 124.5 million euros ($172.8 million) in 2012 for fixing the price of rail track.
Deutsche Bahn then filed a 550 million euro claim for damages against a number of track suppliers including ThyssenKrupp.
ThyssenKrupp said on Tuesday the railway equipment business had no growth prospects in the German market and was under extreme cost pressure.
"Unfortunately we see no realistic chance of the railway equipment business making a value-adding contribution to the group's earnings in the long term," said Klaus Keysberg, a member of the Materials Services management board at ThyssenKrupp.
The construction equipment operations, which ThyssenKrupp said were profitable, will be continued but will undergo a strategy review.
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