Thyssenkrupp group chief executive Miguel López remains upbeat on the prospect of tk’s Steel division being bought by Jindal group.
During the German group’s annual press conference on Tuesday, López confirmed Jindal is currently carrying out due diligence, examining thyssenkrupp Steel’s financial structure and contracts in depth. Some two weeks ago, thyssenkrupp was still reluctant to confirm the due diligence when it was rumoured in the press.
Other than the previous buyer candidate for tk Steel, the Czech EP group, López pointed out that Jindal “is a true professional in steel”, including mining assets, so that it covers the entire production chain. Jindal would therefore be a good fit for tk Steel, just as tk Steel would be a good fit for Jindal.
After Mittal and Tata, Jindal would be the next Indian player to take over a major traditional European steelmaker. “Jindal is not active in Europe yet. So it [tk Steel] is an attractive object,” López said during the conference monitored by Kallanish. He noted that Jindal has pledged to continue tk Steel’s project of building a DRI plant in Duisburg, which he said complements Jindal’s own project of a DRI plant in Oman.
One point not yet clear, and questioned by attending journalists, is if Jindal is aiming for a full or only partial acquisition. The negotiations for now “are targeting a takeover of the majority”, said executive Volkmar Dinstuhl, who is in charge of mergers & acquisitions. “What majority means will show as we go along,” he added.
Dinstuhl was also confronted with the detail that the bidder for tk Steel is not the actual Jindal Steel mill group, but Jindal Steel International, a unit based in Mauritius. Observers have already expressed scepticism if a complex structure with little financial transparency can be trusted. Dinstuhl described it as “a warrantor company that is a backup for the company that wants to make an acquisition”.
