In a significant development for the global steel industry, Jindal Steel International, a part of the Naveen Jindal Group, is reportedly in advanced negotiations to acquire the steel division of German industrial giant Thyssenkrupp. According to four sources familiar with the ongoing discussions, the potential deal for Thyssenkrupp Steel Europe (TKSE) could be structured in several phases.
The Structure of the Potential Acquisition
The talks, which have been ongoing, are exploring a phased approach to the acquisition. One prominent option being discussed would see Jindal Steel International first acquiring a majority stake of 60% in TKSE. The remaining 40% stake could then be purchased later, either in two separate 20% tranches or in one single transaction. The timing of these subsequent purchases is said to depend on the progress made in restructuring the German steelmaker's operations.
This staged transaction model is seen as a strategic move to provide Thyssenkrupp with greater flexibility. A key challenge in any sale is addressing the substantial pension liabilities tied to TKSE, which amount to approximately 2.5 billion euros (around $2.9 billion). This pension burden has been a major stumbling block in previous attempts to sell the steel unit. A phased deal could allow more time to manage this complex financial issue.
Strategic Importance for Both Parties
For Thyssenkrupp, a diversified conglomerate involved in sectors from submarines to car parts, divesting its steel division is a crucial step in its strategy to become a leaner and more focused entity. The company has spent years searching for a suitable buyer for TKSE. While the unit is a cornerstone of Germany's industrial history, it has faced volatility and high operating costs, particularly due to intense competition from Asian producers.
For Jindal Steel International, this acquisition would represent a massive strategic expansion into the European market. It follows the company's recent move in 2024 to acquire Czech steelmaker Vitkovice Steel. Successfully acquiring TKSE, which is Europe's second-largest steelmaker, would dramatically increase Jindal's global footprint and production capacity.
Due Diligence and Official Stance
Jindal Steel has been conducting detailed due diligence on Thyssenkrupp Steel Europe since October 2023, after submitting an initial indicative bid. When approached for comment, Thyssenkrupp stated that all aspects of a potential transaction are being examined as part of this due diligence process, without confirming specific details of the ongoing talks.
If finalized, this deal would mark the end of a long chapter for Thyssenkrupp and open a new one for the Naveen Jindal Group, positioning an Indian industrial powerhouse at the heart of European steel manufacturing.
