SSAB AB’s acquisition of Tata Steel Europe’s IJmuiden steelworks may have hit a stumbling block after two of the Swedish steelmakers’ largest shareholders expressed concerns over the deal last week.
According to a Swedish media report, Swedish asset management firm Industrivärden and local mining company LKAB – who jointly own 20.9pc of SSAB – have raised concerns about acquiring an asset with a higher carbon footprint, which will impact the company’s transition to green steelmaking.
The report cited sources close to the deal, saying that though the deal was not off the table, SSAB had informed Tata Steel it would not be able to close it within the six-month internal deadline that was agreed in November.
However, both SSAB and Tata Steel refused to comment on the report.
Moreover, Credit Suisse analysts noted that even if SSAB could convince shareholders to approve the acquisition there’s still uncertainty over the deal as the European Commission (EC) may reject the merger on grounds of increased sector concentration risk.
The IJmuiden steelworks has a liquid steelmaking capacity of 7.3mn mt per annum and can produce slab, hot and cold rolled coil, and coated strip products (galvanized coil and packaging steels).
IJmuiden has the convenience of its own seaport whereby steelmaking raw materials such as iron ore and coal can easily be unloaded with finished steel exported the other way.