International steel company, Jindal Steel, extends a non-committal offer for Thyssenkrupp's steel division
Thyssenkrupp, the German industrial conglomerate, has received a non-binding bid for its steel division from Jindal Steel International. This potential sale has been the subject of ongoing discussions, with Jindal Steel International making a non-binding offer for Thyssenkrupp Steel Europe (TKSE).
The news of the offer has been positively received by Jürgen Kerner, Thyssenkrupp's deputy supervisory board chairman and a senior IG Metall member. Shares in Thyssenkrupp turned positive after the news, trading 2.1% higher.
However, substantive discussions are needed to gain clarity on the most important open questions related to the offer by Jindal Steel. Thyssenkrupp will closely examine the offer with regard to economic sustainability, the continuation of the green transformation, and employment at steel sites.
Last year, Thyssenkrupp sold a 20% stake in TKSE to Czech billionaire Daniel Kretinsky, with the aim of eventually selling a further 30% stake to create a 50-50 joint venture. However, IG Metall, a powerful labor union, had previously criticized this move, stating that Kretinsky had not provided information about his strategic plans as a co-shareholder.
The companies that have shown interest in a stake in Thyssenkrupp Steel Europe are Jindal Steel International and the Czech group EPG, with Jindal Steel having made an unsolicited purchase offer competing with EPG's plan for a 50/50 joint venture. For negotiations to continue, constructive dialogue with Thyssenkrupp AG and the employee representatives must take place, ensuring a future-oriented and competitive green steel production in Germany and Europe.
Meanwhile, Thyssenkrupp has shortlisted two private equity groups for a potential $17-billion deal for its elevator division. The global M&A activity is dwindling due to the impact of the coronavirus on world economies.
In a separate development, Sanjeev Gupta, a metals tycoon, is targeting Thyssenkrupp in a steel consolidation move.
As the discussions progress, Thyssenkrupp and Jindal Steel International will need to address the key considerations of economic sustainability, the continuation of the green transformation, and employment at steel sites to ensure a successful transaction.
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