The secret plan “Minerva” could have meant the dissolution of voestalpine. However, thanks to the commitment of the workforce and management, it resulted in the final privatization of the Group and a significant bolstering of employee participation.
The “Minerva” secret code
The months prior to the final decision about the privatization of voestalpine AG in the summer of 2003 were marked by political polemics. The state holding company ÖIAG’s secret project called “Minerva” was a—doubtlessly unintended—catalyst for crucial decisions. The project planned the sale of the ÖIAG shares to the automotive supplier Magna and—according to all the available information—would have subsequently resulted in a break-up of voestalpine.
Until that time many employees had regarded the state-owned shareholding as a guarantee of safe jobs and sites. “Minerva” shook this belief to the core. Now it was no longer a question of IF privatization should go ahead. Instead consideration was needed of HOW the (alleged) safety net of state-ownership could be replaced by a suitable shareholder structure. The strategy was two-fold: efforts were made to create a core group of (Upper) Austrian shareholders, while the management and Works Council considered how to leverage one of the Group’s greatest strengths—employee identification with the company.
“Minerva” highlighted the need for a stable structure of Austrian shareholders, free from both political influence and the equally prevalent and problematic Austrian phenomenon of personal networks. During this phase, introducing the motivating instrument of employee shareholdering proved a tactical manoeuvre. To prevent them being able to be forced out, the share of the company held by its employees needed to be greater than the legal 10% limit required to stop minority shareholders being ‘squeezed out’ of their holdings. With the aid of an additional collective agreement it was possible to implement this plan. voestalpine AG purchased six million shares from the ÖIAG and transferred them to the Mitarbeiterbeteiligung Privatstiftung, a private foundation set up to manage employee shareholdings. At 10.2% of the company’s shares, their stake exceeded the squeeze out limit.
In the end, the “Minerva” project had succeeded in strengthening the Group, rather than facilitating its break up.
Two decades ago voestalpine AG started out on its path to becoming a privatized and exchange-listed company. The ‘IPO 1995—20 years on the stock exchange’ series describes key events on the path to becoming an internationally successful steel-based technology and capital goods group.