Liberty Steel announced today it has made a non-binding indicative offer to acquire the steel activities of thyssenkrupp.
GFG Alliance’s unit noted talks with the German conglomerate have been “conducted on a non-exclusive basis, and there is no certainty that the discussions will lead to any agreement or transaction”.
It added a number of financial institutions are supporting the approach, which it hopes will open up the possibility of further negotiations with a view to conducting due diligence for a potential binding bid.
Liberty is a global steel and mining business with annual revenues of about USD 15.00 billion, and 30,000 employees in more than 200 locations on four continents.
The group’s furnaces, mills, services centres and distribution sites are located across UK, Europe, Australia, the US and China.
It serves many sectors, such as construction, energy, oil and gas, aerospace, industrial, automotive, and infrastructure.
“With both transformation experience and an entrepreneurial approach, a possible combination” with thyssenkrupp steel “would create a strong group well positioned to tackle the challenges faced by the European steel industry”, Liberty noted.
According to a Bloomberg report published prior to the announcement, the German conglomerate is hedging its bets by continuing discussions with other possible bidders.
thyssenkrupp has previously tried to team up with Tata Europe but the European Commission scuppered the plans for a joint venture, the news provider noted.
It has also sounded out the possibility of merging the steel arm with SSAB of Sweden, as well as with Salzgitter, its domestic competitor.
Sources close to the matter told Bloomberg Liberty Steel is keen to curry favour with thyssenkrupp’s trade union in order to push through an acquisition.
This includes moving production capacity from its eastern European steel facilities to ones in Germany.
Bloomberg said Thyssenkrupp’s Duisburg plant, which has annual output of 11.00 million tons, could benefit from any such transition by becoming profitable.
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