Tata Steel looks to split European business as SSAB initiates talks to acquire Dutch assets
20 Nov 2020
Tata Steel is planning to split its European business after Swedish steelmaker SSAB initiated talks aimed at potentially buying the Indian group's Dutch steel mill in IJmuiden and related assets, the company said on Friday.
“SSAB has participated in several different discussions concerning consolidations in the European steel industry,” it said, adding, “The discussions with Tata are ongoing but no decisions have been made.”
Tata Steel Chief Financial Officer Koushik Chatterjee said at a conference call on Friday that the company was engaged in consultations with stakeholders.
“Subject to regulatory approvals, we hope to close the transaction in the next six to nine months,” Chatterjee said.
The development comes as European steelmakers look for ways to restructure business to trim idle capacity caused by cheap imports from China and exacerbated by the Covid-19 crisis.
Dutch Prime Minister Mark Rutte welcomed the news, saying a takeover by SSAB could improve prospects for the IJmuiden plant as their activities and products are complimentary and would help make production there more sustainable.
The Dutch government has concerns about Tata Steel’s IJmuiden plant, which is among the most polluting units, achieving climate goals considering its importance for the economy.
Tata Steel is also among top employers in the Netherlands, engaging about 9,000 workers in IJmuiden and 2,000 elsewhere in the country.
Reports citing billionaire investor Rakesh Jhunjhunwala said Tata Steel has received a non-binding offer from SSAB which indicated broad commercial terms but did not disclose the financial terms offered.
Tata Steel has been looking to separate its European steel business for a while after anti-trust regulations blocked plands for a joint venture with Thyssenkrupp.