Abu Dhabi-based Emirates Steel Arkan (ESA) is in talks to acquire a stake in the steel division of the German conglomerate thyssenkrupp AG, with a formal offer expected in a few months.
No concrete developments expected until then until Miguel Angel López Borrego replaces outgoing Martina Merz as chief executive of thyssenkrupp on June 1.
ESA will produce feedstock from renewable energy sources before shipping it to Germany, where thyssenkrupp will further process it, according to the report. it into steel products for the automotive industry.
However, the German group referred to Merz's statement about the group's efforts to find a solution for the steel division. “Regarding the spin-off of the steel business, promising talks have been launched with potential partners,” she said as she announced her resignation this week.
The group struggled for years to spin off tk steel, which failed failed merger with Tata Steel Europe in 2019 and broke off takeover talks with Liberty Steel in 2021. Merz's statement this week shows increased hopes compared to the statements made by the group. at its annual press conference in December.
ESA is part of Arkan Building Materials and is listed on the Abu Dhabi Stock Exchange (ADX). This is a steel plant with a capacity of 3.5 million tons of crude steel per year, producing rebar, wire rod and large-sized rolled products. It is exploring the possibility of setting up a new hot rolling plant based on a direct reduction electric arc furnace, which could be crucial for any partnership with thyssenkrupp.
In March 2022, the steelmaker signed an 18-month memorandum of understanding with the Mauritanian Société Nationale Industrielle Et Minière (SNIM) to explore the possibility of establishing a joint venture for the production of iron ore pellets.
In November, the Brazilian mining company Vale signed an agreement with ESA to establish a megahub in the Khalifa Economic Zone of Abu Dhabi (KEZAD) for the production of sintered low emission iron ore.