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Czech billionaire Daniel Kretinsky has agreed to sell his 20% stake in Thyssenkrupp's steel unit (TKSE) and abandon plans for a joint venture, clearing the way for talks with India's Jindal Steel International, which recently made an indicative bid for the entire business. Kretinsky's EP Group will be reimbursed for the ~EUR 140 million it paid for the stake last year. Thyssenkrupp has long sought to divest TKSE, which faces mounting challenges from cheap Chinese imports, high energy costs, and delays in hydrogen-based decarbonisation. The decision ends stalled negotiations over a German-Czech steel tie-up and boosts momentum toward a possible sale to Jindal.
Czech billionaire Daniel Kretinsky has agreed to sell his 20% stake in Thyssenkrupp's TKAG.DE steel unit and scrap plans for a joint venture for the business, both parties said in a joint statement, paving the way for a possible deal with Jindal Steel. Advertisement
The stake sale ends lengthy talks over what could have become a German-Czech steel and energy giant, discussions that have not made any measurable progress since Kretinsky bought a fifth of Thyssenkrupp Steel Europe (TKSE) last year.
Shares in Thyssenkrupp, which earlier in the day came close to a six-year high, briefly turned negative on the news before recovering to trade 1.6% higher at 1042 GMT.
It now creates momentum for Thyssenkrupp to intensify talks with India's Jindal Steel International, which last month presented an indicative bid for all of TKSE, a volatile business its parent has sought to divest for years.
The statement said that Kretinsky's EP Group "respects Thyssenkrupp AG's preference to concentrate on discussions with Jindal Steel International" and that it would be reimbursed for the purchase price it paid to Thyssenkrupp for the TKSE stake.
While both parties have never disclosed the purchase price, people familiar with the matter have put it at around 140 million euros ($164 million).
The news comes as uncertainty over the prospect of steelmaking in Europe grows, as the sector is contending with cheap Chinese imports, high energy costs and a delay to hydrogen-based decarbonisation of what is one of the most polluting industries.
Kretinsky's EP Group and Thyssenkrupp had the aim of eventually forming a 50/50 joint venture for TKSE, but talks have been fraught with difficulties as powerful unions have accused the Czech businessman of refusing to engage.
Source: Reuters
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