Emirates Steel negotiates thyssenkrupp stake acquisition: reports

Abu Dhabi-based steelmaker Emirates Steel Arkan (ESA) is in talks to acquire a stake in German conglomerate thyssenkrupp AG’s steel unit, with a formal bid expected in months, Bloomberg reports.

No concrete developments are expected until after Miguel Ángel López Borrego takes over from the outgoing Martina Merz as thyssenkrupp chief executive on 1 June.

ESA would produce feedstock from renewable energy before shipping it to Germany where thyssenkrupp would further process it into steel products for the automotive industry, according to the report.

Both ESA and thyssenkrupp declined to comment when approached by Kallanish.

However, the German group did refer to a statement made by Merz on the group’s efforts to find a solution for the steel division. “With regard to the separation of the steel business, promising talks have been initiated with possible partners,” she said when announcing her resignation this week.

The group has for years struggled to spin off tk steel, which saw a failed merger with Tata Steel Europe in 2019 and aborted talks for a takeover by Liberty Steel in 2021. Merz’s statement this week demonstrates increased promise compared to the statements made by the group at its annual press conference in December.

ESA is part of Arkan Building Materials and listed on the Abu Dhabi Securities Exchange (ADX). It is a 3.5 million tonnes/year crude steel capacity steelmaker producing rebar, wire rod and heavy sections. It is studying the possibility of setting up a new DRI-EAF-based hot strip plant, which could be crucial for any partnership with thyssenkrupp.

In March 2022, the steelmaker inked an 18-month memorandum of understanding with Mauritania’s Société Nationale Industrielle Et Minière (SNIM) to study the feasibility of creating a joint venture to produce iron ore pellet.

In November, Brazilian miner Vale signed an agreement with ESA to develop a mega hub at Khalifa Economic Zone Abu Dhabi (KEZAD) to produce low-emission agglomerated iron ore feedstock.

Christian Koehl Germany , Burak Odabasi Turkey