Tata Steel confirms it is in talks with Sweden’s SSAB over the potential sale of its unit in the Netherlands.
Group management is in talks with the supervisory board and management of Tata Steel Netherlands, and the process will move to the next stage including due diligence and stakeholders’ consultations, it says. Proceeds of any strategic restructuring will be deployed towards additional deleveraging of the balance sheet, it adds.
“The company has initiated the process to separate Tata Steel Netherlands and Tata Steel UK and will pursue separate strategic paths for the Netherlands and UK business in the future,” Tata Steel says in a note seen by Kallanish.
The steelmaking group adds that it continues talks with the UK government on potential measures to “…safeguard the long-term future” of Tata Steel UK. It is “…also reviewing all options to make the business self-sustaining without the need for any funding support from Tata Steel India in the future.”
SSAB says it “…has participated in several different discussions concerning consolidations in the European steel industry. The discussions with Tata are on-going but no decisions have been made. There can be no certainty that any transaction will materialize, nor as to the terms of any such potential transaction. Further announcement will be made in due course.”
Rumours about the future of Tata Steel Europe assets have circulated the market for many years. Last year the European Commission blocked the proposed merger between Tata Steel Europe and thyssenkrupp’s steel unit on competition concerns. However, observers agreed the next European steel industry consolidation move would involve Tata Steel and its strategic Ijmuiden site. This has two blast furnaces and is capable of producing some 7.5 million tonnes/year of coil.
If SSAB reaches an agreement to include Tata Steel Netherlands in its group, it will represent a significant further increase to its capacity after its acquisition of Finland’s Rautaruukki in 2014.
