Liberty Steel Set To Bid For Thyssenkrupp Steel Unit

Privately held Liberty Steel Group is set to make a bid for the ailing steel unit of Germany's Thyssenkrupp as soon as Friday, a source close to the process told Reuters on Thursday.

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.

Liberty Steel is a unit of Britain-based conglomerate GFG, which holds the family operations of commodities tycoon Sanjeev Gupta. It has been acquisitive in Europe, most recently in France, where it bought the Hayange business previously owned by British Steel.

Liberty Steel and Thyssenkrupp, shares of which soared more than 23% on the news and were last up 18%, both declined to comment.

Formed by Gupta last year, Liberty Steel comprises all of his family's steel activities, with a view to a potential listing.

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.

News of Liberty Steel's interest, first reported by German magazine Spiegel, 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 possible 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.

(Reuters)