Germany’s thyssenkrupp and Jindal Steel International have mutually decided to pause discussions about the Indian company acquiring a stake in thyssenkrupp’s Steel division, the two groups announced over the weekend.
“The original assumptions and prerequisites for a potential sale of thyssenkrupp Steel have significantly changed in recent months,” the German group says in a statement sent to Kallanish. It refers to progress it has made in realigning its steel segment, for example, with the collective restructuring agreement concluded with union IG Metall.
The self-confidence expressed in the press release is probably even more attributable to developments in the regulatory environment for steelmakers in Europe, which “has changed significantly, becoming fundamentally more favourable”, the firm notes.
Thyssenkrupp welcomes the fact policymakers are increasingly addressing the challenges facing the steel industry, particularly with regard to trade protection measures targeting unfair competition and global overcapacity.
“The conditions for the profitable continuation of thyssenkrupp Steel are better than they have been in a long time,” says thyssenkrupp AG chief executive Miguel López. Thyssenkrupp says it will continue to operate its Steel division “independently”, in order to prepare it for a potential floatation on the stock market.
Although the group is not explicit about it, the strategy it indicates in the statement seems to reject the idea of seeking another partner or buyer for the steel division. This could be considered a signal to US investment fund Flacks Group, which is in talks to take over Acciaierie d’Italia. In March, Flacks was heard suggesting it would consider a bid for thyssenkrupp Steel Europe if talks with Jindal fail (see Kallanish passim).
In a reaction statement, union IG Metall demands to have a say in the upcoming considerations for the future of the Steel division. Regarding the cautious tone used by thyssenkrupp and Jindal in so far as they have “paused” negotiations, the union asks for a clear-cut end to the negotiations “without leaving a back door open”.
Continued insecurity during a period of long negotiations means stress for the workforce, IG Metall warns.
