On 23rd October, Friday it was reported that a British based Indian-born businessman had expressed his intent in the acquisition of Germany based Thyssenkrupp's steel business.
Sanjeev Gupta, Founder of Liberty House Group has reportedly reached out to local governments and labour unions in Germany demonstrating his keen interest in “intensifying the dialogue with Thyssenkrupp, and would like to engage in further due diligence to present a potential binding offer.”
According to Money Control, Gupta is now tasked with the job of convincing the unions of his plans, considering the workers have previously demonstrated their hostility to any change in ownership of the German company. They prefer the local government to take equity in the second-largest steel maker in Europe after ArcelorMittal. And Gupta has emphasised that his plans prevent any redundancies at the plant.
In a statement to Money Control, he said, “At this point of time, we are allowed to reach out to the different stakeholders. We will use the opportunity to explain our plans.
“We have never done any redundancy. In fact, across the world, wherever we have bought units, we have saved jobs. I want to explain to the unions that the combination of LIBERTY and Thyssenkrupp can help preserve jobs,”
The German conglomerate has been under stress for the past few years with the company cautioning that it may incur an operating loss of $1.2 billion this year. Coronavirus has led to a decline in the demand for cars, and the European steel market continues to be inundated with Chinese imports. Gupta, however, reportedly has a two-fold plan to refuel the company.
He will reportedly inject Liberty Steel’s 10 million tons of downstream facilities in Europe with 3 million tons of steel from Thyssenkrupp. The combined entity’s product portfolio, he believes will be more diverse and thus less vulnerable to market volatility.
In the meantime, Gupta faces competition from the Swedish steelmaker SSAB AB which is presently weighing a combination with Tata Steel’s European business as a back-up plan to a deal with Thyssenkrupp AG. SSAB is expected to gain control of Tata Steel’s European business if they pursued such a deal. But Sanjeev Gupta’s Liberty Steel has already made a non-binding indicative offer for the German business.
Thyssenkrupp is expected to pick up to two bidders by the end of November.
