thyssenkrupp AG and Jindal Steel International have decided to suspend their talks on a participation of the Indian company in thyssenkrupp Steel Europe for the time being. The decision is driven by changed framework conditions that have significantly shifted the original assumptions for a possible divestment of the steel segment.
From thyssenkrupp's perspective, considerable progress has been made over the past months in realigning the steel division – particularly through the restructuring collective agreement concluded with IG Metall and the framework agreement among HKM's shareholders on the future positioning of the site in southern Duisburg.
Changed regulatory environment in Europe
In addition, the regulatory environment for the European steel industry has changed considerably and, according to the company, has become fundamentally more favourable. Despite the current surge in energy prices caused by the Iran war, which is raising energy price levels globally, thyssenkrupp sees significant stabilisation and upside potential for the sector. The European Union has acknowledged the importance of steel production for the resilience of industrial value chains and announced measures to better protect the European steel industry from global overcapacity and dumping while further supporting the transition to low-carbon steel production. Planned measures include tightening import quotas, doubling safeguard tariffs when these quotas are exceeded, introducing a Carbon Border Adjustment Mechanism (CBAM) and establishing an EU Steel Action Plan.
Value creation potential at thyssenkrupp Steel
"We have always said: Steel is the future. And a future-proof business is a value-creating business," said Miguel López, Chairman of the Executive Board of thyssenkrupp AG. "Having reached agreement in principle within our own company, with the social partners and with policymakers in Germany and Europe, the conditions for a profitable continuation of thyssenkrupp Steel are better than they have been for a long time. Jindal was a constructive and committed partner throughout the talks. However, we have jointly decided to suspend the negotiations for the time being."
Jindal also emphasised the constructive atmosphere. "We thank thyssenkrupp for the constructive cooperation during the negotiations. Although we have decided to suspend the transaction for now, we remain on friendly terms. Our shared goal of advancing the build-up of low-CO₂ steel production in Europe remains in place," said Narendra Misra, Director of European Operations at Jindal.
Stand-alone solution for thyssenkrupp Steel remains the objective
thyssenkrupp will continue to drive the realignment of the segment forward on its own to establish the steel business profitably. According to the company, the industrial future concept of thyssenkrupp Steel and the restructuring collective agreement with IG Metall have created a viable basis for addressing the structural challenges. A further step was the agreement with Salzgitter on a key issues paper concerning the future of HKM in early February, giving the site in southern Duisburg a new perspective. At the same time, policymakers are increasingly addressing the challenges facing the steel industry, particularly with regard to trade defence measures against unfair competition and global overcapacity. In the medium term, the stated objective remains a stand-alone setup of thyssenkrupp Steel Europe with a possible minority stake of thyssenkrupp AG.
Strategic framework ACES 2030
Under its ACES 2030 strategy, thyssenkrupp AG is pursuing the stand-alone setup of its segments or their opening up to third-party investors. In this context, thyssenkrupp AG will continue to evolve into a financial holding company.
"The more successfully thyssenkrupp Steel Europe implements the realignment that has been initiated, the more attractive this business will become for the capital market and for investors. We expect German and European policymakers to reliably deliver on the contributions they have specifically announced to safeguard resilience," said López.
