As reported by Argus sources close to situation, British steelmaker Liberty Steel will submit a binding bid today for the purchase of ThyssenKrupp Steel Europe.
The application estimates the unprofitable division of the German concern at several billion euros and follows an optional indicative proposal made a few months ago.
If Liberty acquires the steel business in Germany, it will provide its own raw materials for the Liege-Dudelange electroplating plants, as well as all subsequent Liberty plants and its customers. It will also mark the transition of the business into the automotive steel supply chain, which will be a watershed moment for Liberty, which until now has had a very limited presence in Europe.
Higher demand from Liberty's internal assets and customer base will boost ThyssenKrupp Steel Europe's currently low utilization, one source said, generating hundreds of millions of dollars in savings.
According to Deutsche Bank, any deal on the sale of German assets could bring the factories € 200-300 million in savings. Competition concerns are also likely to be less, given the slight overlap in customer base - ThyssenKrupp Steel Europe is heavily focused on the automotive industry, while Liberty sells mostly general industrial segments.
According to recent reports, ThyssenKrupp is also exploring the possibility of spinning off a division through a share listing. Some shareholders and unions question whether the Liberty division should be sold.