The consortium consists of GP Günter Papenburg AG, who currently holds 25% shares of Salzgitter and German major recycler TSR Recycling GmbH & Co KG.
“We can confirm that a non-binding offer has been submitted to Salzgitter AG, stating an indicative offer price of €18.50 ($19.28) per share, and that [Salzgitter] is in talks with the consortium,” Salzgitter’s spokesperson told Fastmarkets.
After the news emerged, Salzgitter’s share prices on Frankfurt Stock Exchange jumped to €16.62 per share on January 23, compared with €15.78 per share on the previous day.
“As soon as a formal offer has been received, the Management Board and the Supervisory Board will comprehensively review and evaluate it in accordance to legal obligations,” Salzgitter’s spokesperson added.
In November 2024, GP Günter Papenburg AG and TSR submitted a non-binding offer, but at €17.50 per share, several sources told Fastmarkets.
The consortium is looking to achieve an aggregate shareholding of at least 45% plus one share, including the shares already held by the German construction company, Fastmarkets previously reported.
Currently, the German state of Lower Saxony is the largest shareholder in the company at 26.5%, according to Salzgitter’s data. GP Gunter Papenburg currently owns a share of 25.1%, and Salzgitter has 10%. The rest of the shares are distributed among other retail and institutional investors.
“In recent months, the state government has held intensive discussions on the plan for a possible takeover of Salzgitter AG by the Papenburg Group and TSR. According to the considerations known to the state so far, no economic advantage or contribution to the sustainable development of Salzgitter AG could be seen from the proposed conditions,” a statement from Lower Saxony’s Ministry of Finance, received by Fastmarkets on January 23, said.
“New and more specific conditions have now apparently been proposed to Salzgitter AG, which must first be examined and evaluated by the board of directors of Salzgitter AG. The Ministry of Finance is not yet aware of the proposal in detail…The state does not plan to sell its shares in Salzgitter AG,” the statement said.
Market brief
Salzgitter currently runs three blast furnaces with a combined capacity of about 4.8 million tonnes per year of crude steel. The company produces hot-rolled coil, cold-rolled coil, electro-galvanized, hot-dipped galvanized and organic coated steel sheet.
The company posted negative financial result for the first nine months of 2024, according to the latest reported published in November 2024.
Company’s steel sales in January-September 2024 decreased by 8.07% compared with the same period of time in 2023 to €7.7 billion. For the same period the company’s earnings before interest, taxes, depreciation and amortization dropped by 44.3% year on year to €320.6 million.
Earnings before interest and taxes was at a loss of €54.6 million compared with a profit of €341.6 million in January-September 2023.
Market conditions in Europe have remained challenging, with real steel consumption deteriorating, with the construction sector in particular suffering from weak demand — under pressure from higher interest rates and rising building costs.
In October 2024, Fastmarkets daily steel HRC index, domestic, exw Northern Europe averaged €549.25 per tonne, the lowest level since November 2020, when the index averaged €530.72 per tonne
This report was updated to include quotes from Lower Saxony’s Ministry of Finance on Thursday January 23.
