Frankfurt (Germany) (AFP) – India’s Jindal Steel International has made an offer for Thyssenkrupp’s steel division, the German company said Tuesday, in what would be a mega-deal for the struggling industrial titan. Once a symbol of German manufacturing might, Thyssenkrupp has fallen into crisis in recent years as it battles high manufacturing costs at home and fierce competition from Asian rivals, particularly in the traditional steel business.
The sprawling conglomerate — whose businesses range from auto parts to submarine-making — has long been seeking to get rid of the loss-making steel unit, which is in the midst of a painful restructuring. It confirmed in a statement that it had received a “non-binding” offer from Jindal Steel International for the purchase of Thyssenkrupp Steel Europe (TKSE). The group said it would “carefully review” the offer and pay “particular attention” to what it would mean for jobs.
Jindal said it was “committed” to the production of green steel, which has been a key focus for Thyssenkrupp in recent years. Neither side mentioned a possible purchase price for the steel business, but the news sent the conglomerate’s shares up almost eight percent in Frankfurt. Juergen Kerner, workers’ representative on the Thyssenkrupp board, said the offer from “growth-oriented” Jindal Steel was “good news” for employees. “Jindal Steel has its own access to raw materials and expertise in the green transformation,” he said, adding it was important to enter into discussions quickly to “gain clarity” on important questions.
The steel unit had announced in November last year that it would seek to cut 11,000 jobs by 2030 — about 40 percent of its workforce. The Indian offer, however, sets up a potential battle with Czech billionaire Daniel Kretinsky, who last year acquired a stake in TKSE through his holding company EPCG.
Thyssenkrupp has been seeking to navigate the long-term costs of the green transition. CEO Miguel Lopez warned in March that a new site in the western city of Duisburg, which forms the heart of its steel operations, designed to produce carbon-neutral steel might not be profitable. In a statement, Jindal Steel said it was committed to making green steel at the same time as turning a profit.
“We believe in the future of green steel production in Germany and Europe,” said Narendra Misra, head of European Operations at Jindal. “Our goal is to preserve and advance the 200-year-old heritage of Thyssenkrupp.” Jindal said it would invest in further green steel production and make Thyssenkrupp “the largest low-emission steel producer in Europe,” adding that it already had a similar site in Oman which is due to start production in 2027.
A spokesman for Kretinsky’s EPCG declined to comment on the Indian offer. Previously, Thyssenkrupp has said discussions were ongoing with the Czech billionaire about “an equal 50/50 joint venture.” Offloading the steel business is part of a broader plan to split Thyssenkrupp into a series of standalone businesses with the aim of boosting profitability.
© 2024 AFP
