Thyssenkrupp has paused talks with India's Jindal Steel International about a possible sale of the German industrial group's steel unit, it said on Saturday. As the Essen-based group has announced, talks with the Indian steel company Jindal regarding a stake in the business have been put on hold. The move is attributed to improved market conditions. However, an autonomous Thyssenkrupp Steel Europe remains stated goal.
Thyssenkrupp AG and Jindal Steel International have mutually decided to pause discussions about the company acquiring a stake in thyssenkrupp Steel Europe. According to the company, the original assumptions and prerequisites for a potential sale of Thyssenkrupp Steel have significantly changed in recent months. Thyssenkrupp has made significant progress in realigning its steel segment. This is particularly evident in the recently concluded collective restructuring agreement on restructuring with IG Metall and the shareholders' agreement on the future positioning of the southern Duisburg site, Thyssenkrupp said.
Changed regulatory framework
Additionally, the regulatory environment for the steel industry in Europe has changed significantly, becoming fundamentally more favorable, the company said. This offers the sector significant potential for stabilization and growth. This remains true despite the current surge in energy prices caused by the war in Ukraine, which is driving up global energy costs. The European Union recognizes the critical importance of steel production for the resilience of industrial value chains. It has expressed commitment to protecting the European steel industry from global overcapacity and dumping, while accelerating the transition to climate-friendly steel production. Measures include tightening import quotas, doubling protective tariffs when these quotas are exceeded, introducing a Carbon Border Adjustment Mechanism (CBAM), and establishing an EU Steel Action Plan.
Significant potential for value creation at Thyssenkrupp Steel
"We have always said: Steel is the future. A sustainable business is a valuable business," explained Miguel López, CEO of thyssenkrupp AG. Now that agreement has been reached in principle within the company itself, , with labor unions, and with policymakers in Germany and Europe, the conditions for the profitable continuation of Thyssenkrupp Steel are better than they have been for a long time. "Jindal has been a constructive and committed partner throughout the discussions. However, we have jointly agreed to pause negotiations for now”, López said.
Thyssenkrupp will continue to drive the restructuring of the segment independently, in order to prepare the steel business for success and profitability. Significant progress has already been made in recent months. The industrial strategy for the future of Thyssenkrupp Steel and the collective restructuring agreement with IG Metall have laid a solid foundation for addressing the structural challenges. Another important step was the agreement reached with Salzgitter in early February on a paper outlining key points regarding the future of HKM, the company said. This has given the southern Duisburg site new prospects. Meanwhile, policymakers are increasingly addressing the challenges facing the steel industry, particularly with regard to trade protection measures against unfair competition and global overcapacity. Against this promising backdrop, the stated medium-term goal remains to establish the independence of thyssenkrupp Steel Europe while thyssenkrupp AG may retain a minority stake.
Source: Thyssenkrupp
