By Christoph Steitz and Tom Käckenhoff
FRANKFURT/DUESSELDORF (Reuters) – Liberty Steel, founded by commodities tycoon Sanjeev Gupta, has made a non-binding offer for the steel unit of German conglomerate Thyssenkrupp, the privately-held group said on Friday.
“Liberty Steel is convinced that a combination with Thyssenkrupp Steel Europe can be the right answer from an economic, social, and environmental perspective,” it said in a statement.
No financial details were disclosed.
A deal would combine the continent’s fourth- and second-largest steelmakers and mark the latest attempt at large-scale consolidation in Europe after a planned joint venture between Thyssenkrupp and Tata Steel was blocked in 2019.
Thyssenkrupp, shares of which soared more than 23% earlier on talk of the deal and were last up 15.6%, said it would look carefully at the offer while it continues talks with other potential partners for the unit.
Formed by Gupta last year, Liberty Steel is a unit of Britain-based conglomerate GFG and comprises all of his family’s steel activities, with a view to a potential listing.
It has been acquisitive in Europe, most recently in France, where it bought the Hayange business previously owned by British Steel.
In Europe, the firm has 13 million tonnes of annual capacity, 72% of its total, and employs 17,000, compared with about 27,000 steelworkers at Thyssenkrupp.
Liberty Steel is advised by a consortium of banks led by Credit Suisse, a person familiar with the matter said.
Its interest comes amid planned protests by steel workers to put more pressure on the government to bail out Thyssenkrupp’s steel unit, which made a nine-month operating loss of 700 million euros ($819 million).
A trader said the bid had “strong potential after a disastrous performance of the shares mirroring corporate chaos”.
Thyssenkrupp CEO Martina Merz said this week the company would consider all options for the unit, including selling a stake to the German government.
Economy Minister Peter Altmaier has so far opposed the idea, instead favouring support payments to help the industry transition to hydrogen-based steel production.
Thyssenkrupp is also exploring tie-ups with Germany’s Salzgitter, Sweden’s SSAB and Tata once again, sources have told Reuters.
(Additional reporting by Emma Thomasson; Editing by Chris Reese, Pravin Char, Toby Chopra and Kirsten Donovan)
FILE PHOTO: A ThyssenKrupp steel worker is pictured amid finished steel coils at the rolling mill department of the German steel maker in Duisburg, Germany, January 30, 2020. REUTERS/Wolfgang Rattay