Tata Steel said Jan. 29 it remains “committed to finding a sustainable solution for its European portfolio” after talks ended with Swedish steelmaker SSAB on a possible acquisition of Tata Steel Europe’s integrated IJmuiden works in the Netherlands.
“Tata Steel confirms that SSAB has withdrawn its initial interest for Tata Steel Netherland business,” the India-based steelmaker said in a statement. “However, Tata Steel wishes to confirm that it is committed to arriving at a strategic resolution for its European portfolio. Tata Steel’s IJmuiden plant is among the most environmentally efficient and cost competitive steel producers in Europe.”
Tata Steel’s intention is to continue with the plan to separate its UK business, centered around the integrated Port Talbot steelworks, and its Netherlands business, centered around IJmuiden, as announced in November 2020, according to company sources.
In the case of the UK operations, “discussions with the UK government to seek both short- and longer-term support for Tata Steel’s UK operations continue,” a Tata Steel spokesman told S&P Global Platts.
SSAB, in talks with Tata Steel over the future of IJmuiden and related downstream assets for several months, said Jan. 29 that these talks had concluded. SSAB, which is planning to lead the market with production of the first fossil-free steel by 2026, said it could not be sufficiently certain that acquisition of IJmuiden would allow it to implement its industrial plan with the preferred technical solutions as quickly as it would wish.
“We cannot align Tata Steel IJmuiden with our sustainability strategy in the way desired,” SSAB president and CEO Martin Lindqvist said in a statement.
Lindqvist added on a conference call with analysts that he considered Tata Steel IJmuiden to be a “fantastic facility” with a “broad product program and good cost efficiency,” describing it as “probably the best integrated strip steel facility in Europe,” but adding that it did not fit into SSAB’s overall strategy “on cost-related issues.”
SSAB did not speak to the government about any matter related to the potential acquisition of Tata’s Netherlands plant, Lindqvist said.
Tata Steel is among the world’s largest steel companies with an annual crude steel capacity of 34 million mt/year, with around two-thirds of its business based in India. The company recorded a consolidated turnover of $19.7 billion in the financial year ending March 31, 2020 and said Jan. 29 it remains committed to undertaking significant deleveraging in FY21 and beyond.
SSAB still eyeing green steel M&A
SSAB will continue to look at other potential merger and acquisition opportunities in the green steel area, Lindqvist told the analysts.
“We will look at possibilities of broadening our product portfolio in this area; customers are asking us for this,” he said. “If we see an opportunity to further increase the speed to target this development (of fossil-free steel) we will definitely take a look.”
The company is in final discussions on where to locate its innovative joint-venture HYBRIT fossil-free steel demonstration plant. It expects the first batches of steel from the pilot plant produced using hydrogen early this year, and then will work with customers on prototypes, he said.
— Diana Kinch
