Saudi Wealth Fund Weighs Stake in Thyssenkrupp’s Hydrogen Unit

(Bloomberg) -- Saudi Arabia’s Public Investment Fund is considering buying a stake in Thyssenkrupp AG’s hydrogen unit as the oil-rich kingdom pivots to greener forms of energy production, people familiar with the matter said.

The sovereign wealth fund is in the early stages of studying a potential investment in the engineering conglomerate’s Nucera business, the people said, asking not to be identified discussing confidential information. 

Thyssenkrupp has been preparing a listing of Nucera that could it at as much as 5 billion euros ($5.4 billion). It plans to retain a majority stake in Nucera after any IPO, Bloomberg News reported in January.

Deliberations are ongoing, and there’s no guarantee PIF will proceed with an investment, the people said. A Thyssenkrupp spokesperson reiterated the company’s plans to pursue an IPO of Nucera, while declining to comment on potential Saudi interest. A representative for PIF declined to comment. 

Any deal would feed into Saudi Arabia’s ambition of becoming the world’s biggest exporter of hydrogen, an element billed as key to cutting emissions from carbon-heavy industrial processes and helping the world shift to more sustainable energy use.

Nucera constructs plants that generate hydrogen gas from renewable sources of energy such as solar and wind. Hydrogen converts to electricity without greenhouse gas emissions when fed through a fuel cell or burned in a turbine, and can also be used for energy storage.

Thyssenkrupp is already working with Saudi Arabia to build a green hydrogen plant that will power the $500 billion Neom megaproject -- a new city under development on the kingdom’s northwest Red Sea coast.

PIF is in the midst of transforming its investment portfolio to prepare the world’s biggest crude-exporting nation for a post-oil future. Once a sleepy holding company for government investments that hardly anyone outside the kingdom had heard of, it’s now snapping up everything from football clubs to electric carmakers. 

The need for investment in more diversified energy sources has been underscored this year by the unprecedented surge in power and natural gas prices. This has been exacerbated by the impact of Russia’s war in Ukraine, a conflict that’s also effectively shut the market for IPOs.

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