German steel conglomerate thyssenkrupp is in talks with Liberty Steel to clarify some of the points in its bid to buy the former’s steel business.
Martina Merz, chief executive officer of thyssenkrupp said in a published speech for the shareholder meeting on Feb 5 that the company was still examining the firm bid made by Liberty Steel in January for the steel business. She added that while the offer was not binding thyssenkrupp was seeking clarification from the UK-based steelmaker on many of the “complex aspects” of the bid.
In the meanwhile, Merz emphasized that the company was also working towards looking for two alternate solutions to shore up the steel business—either to keep the steel business as part of the group or spin it off into a separate entity.
According to media reports, one of the key aspects that thyssenkrupp is considering in its negotiations with Liberty is the €4bn worth of pension liabilities of the steel unit and whether it can be transferred to Liberty as part of the transaction.
If thyssenkrupp were to accept Liberty’s offer, the resulting entity would create a €200-300mn business, while helping Liberty utilize thyssenkrupp to produce around 3mn mt of hot-rolled coil, which it currently purchases from third-parties.