SSAB is holding preliminary talks with Tata Steel over a potential merger with its European business, according to a Bloomberg report citing people familiar with the matter.
The Swedish steelmaker declined to comment when approached by Kallanish, saying: “We do not comment on rumours.” A Tata Steel Europe representative responded: “We do not comment on rumour or speculation.”
The news comes following the collapse last year of the proposed merger between Tata Steel Europe and thyssenkrupp’s steel unit after it was blocked by the EU on competition concerns. This was despite both steelmakers offering significant concessions in order to make the deal happen (see Kallanish passim).
Thereafter, Tata Steel Europe announced a restructuring programme that entails the reduction of up to 3,000 jobs across Europe, in order to ensure continuing operation. Also included is the target to increase sales of high-value added products, and the reduction of procurement costs through better cooperation with other Tata Steel group companies. The situation has been further complicated by the Covid-19 pandemic this year.
Thyssenkrupp Steel Europe, meanwhile, said after the collapsed merger it was determined to shape its own future and regain competitiveness without a partner. The week before last, Liberty Steel confirmed it had made a non-binding indicative offer to acquire the steel unit of thyssenkrupp. In its third-quarter earnings call a few days later, SSAB said it was not engaging in bidding for the steel arm of the German group.
