Thyssenkrupp calls off talks with UK's Liberty on steel unit sale
23 February 2021
German conglomerate Thyssenkrupp has called off talks to sell its steel division to Britain’s Liberty Steel citing failure to agree on key issues that the company sought to address.
Liberty Steel, led by Sanjeev Gupta had, last month, submitted a revised non-binding bid for Thyssenkrupp’s Steel Europe, Europe’s second biggest in terms of sales, which sources said included commitments to protect jobs and sites.
Thyssenkrupp, however, found the revised offer below expectations as no common solution could be found for key requirements addressed by Thyssenkrupp.
Thyssenkrupp said it would now continue to drive forward a sustainable position for steel on its own. The company said its board is working on a consistent further development of the Steel Strategy 20-30 in order to address the consequences of the corona pandemic and to make steel sustainably profitable and thus future-proof.
“We regret this step because we perceived Liberty Steel as a serious partner in the process,” Thyssenkrupp Chief Financial Officer Klaus Keysberg said in a statement.
Liberty Steel’s bid assumed a negative equity value for Thyssenkrupp’s steel division of more than 1.5 billion euros ($1.8 billion), according to people familiar with the matter.
Gupta told German business paper Handelsblatt on Thursday that Liberty Steel was prepared to resume negotiations with Thyssenkrupp, saying it was incomprehensible why the German group called off the deal without serious negotiations.
Thyssenkrupp’s move to terminate talks shifts the focus to the group’s two other scenarios for its steel division: keeping it or spinning it off to shareholders. Both would entail major additional cost and job cuts.
“The steel business of Thyssenkrupp needs to be realigned and adjusted,” the Alfried Krupp von Bohlen und Halbach foundation, Thyssenkrupp’s top shareholder, said.
The move comes after Sweden’s SSAB last month abandoned plans to buy the Dutch operations of Tata Steel, another Europen steel business in distress.