INDIAN-ORIGIN British billionaire Sanjeev Gupta on Friday(16) said that his Liberty Steel Group had made a non-binding indicative offer for the steel activities of German industrial giant Thyssenkrupp.
Liberty said in a statement that it “is open to intensify the dialogue with Thyssenkrupp and would like to engage in further due diligence to present a potential binding offer”.
Gupta’s firm said that a possible tie-up would create a strong group well positioned to tackle the challenges faced by the European steel industry.
Thyssen said it would “carefully look at the offer”, adding that “at the same time, we will continue the discussions with other potential partners in the same way as before”.
It comes with the European steel sector weighed down heavily by oversupply, fierce Chinese competition and the economic fallout from the coronavirus pandemic.
German weekly magazine Der Spiegel reported earlier that Thyssenkrupp was in discussions also with Tata Steel and Sweden’s SSAB over a potential sale.
Thyssenkrupp chief executive Martina Merz this week also said that “state participation is one option”.
Fearing massive job cuts, Thyssenkrupp workers belonging to German union IG Metall were Friday(16) holding a demonstration to demand a rescue package from Berlin.
Following Liberty’s announcement, Thyssenkrupp shares were up 17 per cent, compared with a rise of 0.6 per cent on the Frankfurt exchange.
The German industrial giant has suffered from the previous failure of its steel merger with India’s Tata after it was blocked by the European Commission last year.
Its suitor Liberty is a global steel and mining business with annual revenues of about $15 billion employing 30,000 staff in more than 200 locations worldwide.
“With both transformation experience and an entrepreneurial approach, a possible combination of Liberty Steel and Thyssenkrupp Steel would create a strong group well positioned to tackle the challenges faced by the European steel industry and accelerate the transformation to green steel,” Liberty said Friday.
Germany adopted in July a plan to make its steel sector “carbon neutral” by 2050, although without any concrete measures.
Liberty, part of Gupta’s Liberty House Group, has also suffered a drop in demand for its UK steel products owing to cheap Chinese imports.
Britain’s steel sector has struggled for some time and endured a tough 2019.
But in November, Chinese industrial giant Jingye Group agreed to buy bankrupt British Steel in a rescue deal.