By Christoph Steitz and Tom Käckenhoff
FRANKFURT/DUESSELDORF (Reuters) – Thyssenkrupp has received a non-binding bid for its steel unit from a division of Indian conglomerate Naveen Jindal Group, the German company said on Tuesday, the latest twist in the group’s years-long effort to dispose of the business.
News of the indicative bid for Thyssenkrupp Steel Europe (TKSE) – Germany’s largest steelmaker which made 10.7 billion euros ($12.6 billion) in sales last year – sent shares in its parent up as much as 7.9% to their highest level in nearly four and a half years. They closed up 4.4%.
Thyssenkrupp said it would closely examine the offer “particularly with regard to economic sustainability, the continuation of the green transformation and employment at our steel sites”.
It did not provide any financial details about the bid, which comes as the German submarines-to-car parts group is seeking to partially divest most of its businesses in a bid to become leaner and more focused.
A sale to Jindal Steel International, the international steel arm of the Naveen Jindal Group, would be a success for Thyssenkrupp after previous attempts to divest TKSE all failed, with pension liabilities of around 2.7 billion euros remaining a key hurdle.
Jindal Steel International, in a separate statement, said its offer would secure steel production in Germany, include the completion of a green steel production site by TKSE in Duisburg, and a more than 2 billion euro commitment to establish additional electric arc furnace capacity.
“Our goal is to preserve and grow Thyssenkrupp’s 200-year industrial legacy and help transform it into Europe’s largest integrated low emission steelmaker,” Narendra Misra, director of European Operations at Jindal, said.
Jindal Steel International, which last year acquired Czech steelmaker Vitkovice Steel, would also be prepared to take on TKSE’s pension liabilities in a deal, a person briefed on the matter said.
Thyssenkrupp last year sold a 20% stake in TKSE to Czech billionaire Daniel Kretinsky, with the aim of eventually selling a further 30% stake to eventually create a 50-50 joint venture.
Powerful labour union IG Metall has criticised the move, saying Kretinsky had not provided information about his strategic plans as a co-shareholder.
Kretinsky’s EPCG division declined to comment.
Thyssenkrupp’s deputy supervisory board chair and senior IG Metall member Juergen Kerner said news about the offer was good and that deeper discussions should start as soon as possible.
($1 = 0.8468 euros)
(Reporting by Christoph Steitz; Editing by Rachel More and Susan Fenton)
