News Orders & Deals Thyssenkrupp Confirms Confidential Talks With Jindal Steel For Steel Business SaleThyssenkrupp Confirms Confidential Talks With Jindal Steel For Steel Business Sale
Germany's Thyssenkrupp has officially confirmed confidential talks with Jindal Steel International regarding the potential sale of its steel business. The proposed deal involves a phased acquisition structure with Jindal initially acquiring 60% of Thyssenkrupp Steel Europe, followed by the remaining 40% stake to help manage €2.50 billion in pension liabilities.
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Germany's Thyssenkrupp has officially confirmed that the company is in confidential talks with Jindal Steel International regarding a possible sale of its steel business. The confirmation comes as both parties continue due diligence processes that began in October.
Official Confirmation and Current Status
A Thyssenkrupp spokesperson told NDTV Profit that the company is currently in confidential talks with Jindal Steel International and employee representatives regarding the potential transaction. The spokesperson emphasized that all relevant parameters including valuation, obligations, and future investments in the non-binding, indicative purchase offer will be addressed directly between the parties during ongoing due diligence and contract negotiations.
| Transaction Status: | Details |
|---|---|
| Current Stage: | Confidential talks confirmed |
| Due Diligence Start: | October |
| Parties Involved: | Jindal Steel International, employee representatives |
| Offer Type: | Non-binding, indicative purchase offer |
| Assessment Parameters: | Valuation, obligations, future investments |
Proposed Deal Structure
One proposal under consideration involves Jindal acquiring an initial 60% stake in Thyssenkrupp Steel Europe (TKSE), with the remaining 40% to be purchased later. This phased approach could occur either in two tranches of 20% each or through a single transaction, depending on restructuring progress. The structure aims to help Thyssenkrupp manage approximately €2.50 billion in pension liabilities linked to TKSE, which has been a key obstacle in previous sale attempts.
| Deal Structure: | Information |
|---|---|
| Initial Stake Proposed: | 60% |
| Remaining Stake: | 40% (in phases) |
| Pension Liabilities: | €2.50 billion |
| Phase Options: | Two 20% tranches or single transaction |
Strategic Significance and Timeline
For Jindal Steel International, part of the Naveen Jindal Group, this acquisition would represent significant European expansion following its purchase of Czech-based Vitkovice Steel. The deal would conclude years of Thyssenkrupp's efforts to divest TKSE, a business deeply rooted in Germany's industrial legacy but burdened by high costs and stiff Asian competition.
A Jindal delegation is expected to visit TKSE's Duisburg plant in January for technical assessment. Thyssenkrupp CEO Miguel Lopez recently described Jindal as an 'optimal fit' for TKSE, citing restructuring efforts that sparked the Indian firm's interest.
| Key Milestones: | Details |
|---|---|
| Plant Visit: | January (Duisburg facility) |
| Assessment Type: | Technical evaluation |
| Previous Acquisition: | Vitkovice Steel (Czech Republic) |
| Strategic Focus: | European expansion |
| CEO Assessment: | Jindal described as 'optimal fit' |
Management Perspectives
Lopez added that Thyssenkrupp maintains a contingency plan should the current talks fail, though specific details were not disclosed. The potential transaction represents ongoing consolidation trends in the global steel industry, where companies explore strategic partnerships to strengthen market positions. The deal is critical for Thyssenkrupp as the German conglomerate seeks to streamline operations and sharpen its focus.
Historical Stock Returns for Jindal Steel
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +3.67% | +7.75% | +13.57% | +12.02% | +32.96% | +311.84% |
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