Liberty Steel Group, owned by Indian-British billionaire Sanjeev Gupta, said on Friday it had made a non-binding indicative offer for the steel activities of German industrial giant Thyssenkrupp.
Liberty said in a statement that it “is open to intensify the dialogue with Thyssenkrupp and would like to engage in further due diligence to present a potential binding offer”.
It comes with the European steel sector weighed down heavily by oversupply, fierce Chinese competition and the economic fallout from the coronavirus pandemic.
German weekly magazine Der Spiegel reported earlier that Thyssenkrupp was in discussions also with Tata Steel and Sweden’s SSAB over a potential sale.
Thyssenkrupp chief executive Martina Merz this week also said that “state participation is one option”.
Fearing massive job cuts, Thyssenkrupp workers belonging to German union IG Metall were Friday holding a demonstration to demand a rescue package from Berlin.
Following Liberty’s announcement, Thyssenkrupp shares were up 17 per cent, compared with a rise of 0.6 per cent on the Frankfurt exchange.
Liberty is a global steel and mining business with annual revenues of about €13bn employing 30,000 staff in more than 200 locations worldwide
The German industrial giant has suffered from the previous failure of its steel merger with India’s Tata after it was blocked by the European Commission last year.
Its suitor Liberty is a global steel and mining business with annual revenues of about $15 billion (€13bn) employing 30,000 staff in more than 200 locations worldwide.
“With both transformation experience and an entrepreneurial approach, a possible combination of Liberty Steel and Thyssenkrupp Steel would create a strong group wel-positioned to tackle the challenges faced by the European steel industry and accelerate the transformation to green steel,” Liberty said on Friday.
Germany adopted in July a plan to make its steel sector “carbon neutral” by 2050, although without any concrete measures.
Steel will need €30 billion by 2050, and €10bn by 2030, to become carbon neutral, according to industry figures.
Liberty, part of Gupta’s Liberty House Group, has also suffered a drop in demand for its UK steel products owing to cheap Chinese imports.
Britain’s steel sector has struggled for some time and endured a tough 2019.
But in November, Chinese industrial giant Jingye Group agreed to buy bankrupt British Steel in a rescue deal.