London — Liberty Steel Group made a non-binding offer Oct. 16 to buy Thyssenkrupp Steel Europe, Liberty confirmed in a statement sent to S&P Global Platts.
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Liberty's proposal is a non-binding indicative offer subject to certain assumptions about the business and backed by "a number of financial institutions," according to Liberty. No financial details were disclosed.
Liberty said it would like to start negotiations to make a binding offer should the two steelmakers reach agreement.
"From an economic perspective, there is potential for a compelling industrial concept given that the businesses are complementary with respect to assets, product lines, customers, and geographic footprint," Liberty said.
"We will now carefully look at this offer. At the same time, we will continue the discussions with other potential partners in the same way as before. Our goal is to make the steel business sustainably fit for the future. It is important for us to find the best solution," a Thyssenkrupp spokesperson told Platts.
Thyssenkrupp's share values surged in early trading when the news broke.
Analyst Marc Gabriel at Bankhaus Lampe told Platts that the sale of the Elevator unit late July has improved Thyssenkrupp's overall position, which means that there would be less pressure at Thyssenkrupp to sell the steel unit, but on the other hand the company is also in the position to make concessions.
The powerful union and worker representatives at Thyssenkrupp are likely to need some convincing for a takeover by Liberty, according to sources and the head of union IG Metall, Knut Giesler opposed the news early Oct. 16 in a Reuters interview.
Thyssenkrupp has been openly saying they would be searching for a potential buyer for the steel unit following the collapse of merger talks with Tata Steel in 2019. There have been previous reports that Swedish steelmaker SSAB would be a suitable partner for a tie-up while German steelmaker Salzgitter denied any current talks, while a revival with Tata has also been under discussion, if a solution with the troubled UK Port Talbot plant could be found.
While Thyssenkrupp has repeatedly said it will not disclose who it is in discussions with, sources close to the company have said that the companies mentioned in the press reports are still not out of the question.