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Metals tycoon Gupta targets Thyssenkrupp in steel consolidation push

Metals tycoon Gupta targets Thyssenkrupp in steel consolidation push

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Published on date 17th Oct 2020.

FRANKFURT/DUESSELDORF (Reuters) - Liberty Steel, founded by commodities tycoon Sanjeev Gupta, on Friday said it had made a non-binding offer for Thyssenkrupp`s TKAG.DE steel unit, hoping to forge a European champion to master the transformation towards carbon-neutral production.

A deal would combine the continent`s fourth- and second-largest steelmakers after a planned joint venture between Thyssenkrupp and Tata Steel TISC.NS was blocked in 2019.

“I truly believe in the future of European steel,” Gupta told journalists during a call. “By investing in green steel I believe the industry can transform and thrive in the long-term.”

He said that steel as a business needed time, adding that was one of the reasons why belonged in private hands.

Gupta shied away from putting a number on expected synergies, but said his group had spent more than 5 billion euros ($5.9 billion) over the last five years to acquire and invest in companies.

Thyssenkrupp shares surged as much as 23%, and the Essen-based company said it would carefully study the offer, details of which were not disclosed, even as it continues talks with other potential partners.

Estimates for the enterprise value of Thyssenkrupp’s steel unit range anywhere between 1.2 and 4.5 billion euros.

Liberty said it was open to intensifying talks to explore making a binding offer for the unit, with Gupta saying he would seek broad support from stakeholders, including unions which have been sceptical so far.

A sale of the steel business would mark a radical change in Thyssenkrupp’s composition and structure, following the divestment of its elevators business earlier this year.


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