Liberty submits firm bid for ThyssenKrupp Steel Europe

UK-based steelmaker Liberty Steel will submit its firm bid for ThyssenKrupp Steel Europe today, sources close to the situation said.

The bid values the lossmaking unit at several billion euros, and follows the non-binding indicative offer it made a few months ago. Investment bank Jefferies has valued the unit at around €1bn.

Should Liberty acquire the Steel Europe business, it would provide in-house feed for the Liege-Dudelange galvanising plants as well as all of Liberty’s downstream plants and its customers. It would also mean a move into the automotive supply chain for Liberty, which has so far been a very limited part of its European business.

The stronger demand from Liberty’s internal assets, and customer base, would boost currently low utilisation at Steel Europe, providing “many hundreds of millions” of dollars in savings, one source said. Deutsche Bank said any deal could yield savings of €200mn-300mn. Competition concerns are also likely to be lower, given the small overlap in customer base — Steel Europe is heavily automotive focused, while Liberty sells primarily into general industrial segments.

ThyssenKrupp is also exploring a spin-off of the division through an equity listing, according to recent press reports — some shareholders and unions have questioned whether or not the division should be sold to Liberty.

By Colin Richardson