Thyssenkrupp Steel receives proposal from Indian sources
In a significant development, Indian steel giant Jindal Steel has submitted an indicative, non-binding offer to buy the struggling steel division of Thyssenkrupp. This offer comes as a positive sign for Thyssenkrupp's employees and the works council, who view it as a potential lifeline for the ailing division.
According to the offer, Jindal Steel plans to invest more than €2 billion in Thyssenkrupp's DRI plant in Duisburg, Germany. This investment includes completing the plant under construction and creating light arc capacities worth over €2 billion. These light arc capacities will further process the sponge iron from the DRI plant.
Thyssenkrupp's CEO, Miguel López, has emphasised the importance of entering into substantial talks to clarify open questions as soon as possible. The details of the offer were not initially disclosed by Thyssenkrupp.
Jindal Steel promises a combination of financial strength, global steel expertise, a clear vision for decarbonization, and competitive steel production in Germany. The company is pursuing a clear growth and expansion strategy, as evidenced by its recent acquisitions in Europe, such as the steel company in the Czech Republic.
In the fiscal year 2023/24 (ending September 30), Thyssenkrupp's steel division generated a clean operating result (EBIT) of 261 million euros from revenues of 10.7 billion euros. This financial performance indicates the potential value that Jindal Steel sees in Thyssenkrupp's steel division.
Tekin Nasikkol, chairman of the works council, has stated that the owning family of Jindal Steel has expressed their intention to invest in Thyssenkrupp's sites and emphasised the importance of co-determination culture. IG Metall, a German metalworkers' union, has responded positively to the offer, viewing it as good news for Thyssenkrupp's employees.
Jindal Steel aims to make Thyssenkrupp Steel Europe's largest integrated and climate-friendly steel producer. The company's European chief, Narendra Misra, stated that the company believes in the future of green steel production in Germany and Europe.
Thyssenkrupp's board of directors will review the offer, focusing on its economic viability, continuation of the green transformation, and employment at their steel sites. If the offer is accepted, Jindal Steel would take a significant step towards expanding its European footprint and Thyssenkrupp would secure a future for its steel division.
Jindal Steel is part of the family-owned Naveen Jindal Group. Currently, the company is also participating in the bidding process for a steelmaker in Italy. The outcome of these negotiations could shape the future of the European steel industry.
