Liberty to start due diligence of Thyssenkrupp Steel Europe's business

Liberty Steel Group will begin due diligence of Thyssenkrupp Steel Europe's business as the next phase after making a non-binding offer to take over the German company's steel assets in October, both companies confirmed to S&P Global Platts Dec 2.

In statements sent to S&P Global Platts, both said they agreed to progress with the process.

"Liberty Steel will shortly begin a detailed due diligence and thus gain insight into key business data of Thyssenkrupp's steel business," Liberty and Thyssenkrupp said.

Thyssenkrupp said at its annual result press call in November the company would give an update by March next year on a sale, merger or "standalone" solution for the struggling steel unit. Thyssenkrupp reiterated that the company remains in non-exclusive talks with other partners as well.

Thyssenkrupp said it would move on with restructuring the steel unit regardless of a partner. This includes a "high likelihood" its Duisburg plate mill will close 2021 as it was not possible to find a buyer by the deadline of Dec. 31. Thyssenkrupp is continuing with a profitability analysis of the Bochum plant.

Liberty's Liege-Dudelange mills in the Benelux region meanwhile have their own travails, having had to cancel orders for coated material because of a shortage of hot-rolled coil from main supplier ArcelorMittal.

Liberty confirmed to Platts Nov 26 the mills were experiencing supply disruption, affecting shipments to customers. The supply issue happened earlier this year as well when Liberty said in February that there were temporary supply issues. The difference this time for customers is that the market is finding itself in a serious steel shortage making it difficult for steel buyers seeking alternative options at other mills as lead times are now stretching into the second quarter.

The move to the due diligence phase comes as the potential takeover of Tata Steel Netherlands by Swedish steelmaker SSAB is progressing as well. The two companies confirmed November they would be in talks, initiated by SSAB.