Cevian sees SSAB as healthiest steel partner for Thyssenkrupp
2020-07-22 13:44:33 [Print]
Activist fund Cevian, Thyssenkrupp's No.2 shareholder, has identified Swedish steelmaker SSAB as the financially strongest partner for a potential steel tie-up, two people familiar with the matter said.
Among the possible partners, which include Germany's Salzgitter and Tata Steel, SSAB is the healthiest in terms of balance sheet, the sources said, citing a document the fund prepared for Thyssenkrupp's leadership.
The fund has not recommended a scenario in the paper, the sources said. They added Thyssenkrupp needed to keep an open mind and not commit to any partner too early because that could weaken its negotiating position.
Europe's steel sector was already under pressure from weak demand and ample supply, a situation aggravated by the COVID-19 pandemic, which further depressed demand from industry.
Sweden's SSAB, Europe's sixth-largest steelmaker, on Tuesday reported a 251 million Swedish crowns ($28 million) loss for the second quarter.
Thyssenkrupp is looking at strategic options for its steel business, which could result in merging it with a peer, selling a majority stake or keeping it.
Its latest efforts follow an attempt to combine Thyssenkrupp's steel unit with the European unit of Tata Steel, which fell apart in 2019 on antitrust concerns after years of talks.
A deal with SSAB would likely face resistance from powerful German unions, who fear it would cause major job losses on the Thyssenkrupp side, a banking source said.
Among the possible partners, which include Germany's Salzgitter and Tata Steel, SSAB is the healthiest in terms of balance sheet, the sources said, citing a document the fund prepared for Thyssenkrupp's leadership.
The fund has not recommended a scenario in the paper, the sources said. They added Thyssenkrupp needed to keep an open mind and not commit to any partner too early because that could weaken its negotiating position.
Europe's steel sector was already under pressure from weak demand and ample supply, a situation aggravated by the COVID-19 pandemic, which further depressed demand from industry.
Sweden's SSAB, Europe's sixth-largest steelmaker, on Tuesday reported a 251 million Swedish crowns ($28 million) loss for the second quarter.
Thyssenkrupp is looking at strategic options for its steel business, which could result in merging it with a peer, selling a majority stake or keeping it.
Its latest efforts follow an attempt to combine Thyssenkrupp's steel unit with the European unit of Tata Steel, which fell apart in 2019 on antitrust concerns after years of talks.
A deal with SSAB would likely face resistance from powerful German unions, who fear it would cause major job losses on the Thyssenkrupp side, a banking source said.
