It is reported that the German company Thyssenkrupp is considering the possibility of transferring its steel division TKSE (Thyssenkrupp Steel Europe), known for its complex structure and high costs in Germany, to the Indian company Jindal Steel International.
According to sources, the parties are working on a deal based on a phased sale model.
It is reported that Jindal Steel began the due diligence procedure in October after submitting an indicative proposal for TKSE, one of the leading European steel producers. The potential sale is seen as an important step in Thyssenkrupp's strategy to move towards a more compact and focused corporate structure.
Sources indicate that initially Jindal Steel will acquire a controlling stake in TKSE in the amount of about 60%. The remaining 40% can be transferred either in two separate tranches of 20% each, or in a single transaction, depending on the progress made in the restructuring process.
One of the sources noted that Thyssenkrupp agreed to a phased sale due to pension obligations of about 2.5 billion euros, which previously complicated the sale process, adding that such an approach could provide the company with greater flexibility.
Despite the fact that the due diligence process is ongoing and the final terms have not yet been determined, Thyssenkrupp shares rose by as much as 4.9% after the publication of the sale reports, becoming the day's growth leaders in the Frankfurt mid-cap index. One investor commented on it this way: "After many years of an inconclusive process, the likelihood of a sale now seems to be taking shape."
Jindal Steel delegation to visit Germany in January
The potential sale of TKSE is seen as a major event that could put an end to Thyssenkrupp's lengthy search for a buyer. TKSE, a key part of Germany's industrial heritage, is going through a difficult period, especially due to increased competition from Asian competitors and high operating costs.
Jindal Steel International, the global steel division of Naveen Jindal Group, entered the European market in 2024 through the acquisition of Czech manufacturer Vitkovice Steel. The acquisition of TKSE will be the company's largest move in the region to date.
Thyssenkrupp said in a statement that all aspects, including valuation, commitments and future investment requirements, will be considered during the discussions, adding: "As negotiations are still at an early stage, we are unable to provide detailed comments at this time." Jindal Steel International did not provide any comments.
It is expected that after the postponed visit, originally scheduled for December, the Jindal delegation will leave
