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In yet another setback, Tata Steel Europe’s bid to sell its IJmuiden plant and related downstream assets to Swedish steel maker SSAB has failed as the latter feels that the deal will not fit into its sustainability strategy.
Confirming that SSAB has withdrawn its initial interest for acquiring Tata Steel’s Netherlands business, Tata Steel said it is committed to arriving at a strategic resolution for its European portfolio.
Tata Steel, CII to develop green steel framework
Tata Steel’s IJmuiden plant is among the most environmentally-efficient and cost-competitive steel producers in Europe, it said.
Last November, SSAB, which has significant presence in Europe, showed interest in acquiring Tata Steel’s Netherlands business to achieve scale and reap the benefit of synergy.
In 2019, Tata Steel Europe entered into talks with German steel major ThyssenKrupp for a potential merger of their business, but it was rejected by European regulators due to concern that it would spike steel prices.
Sweden’s SSAB sends feelers for Tata Steel’s Europe assets
Last May, Tata Steel explored the possibility of merging a part of its business with ThyssenKrupp and later ended up with plans to sell its entire European asset to SSAB.
Alongside SSAB, Indian-born British businessman Sajeev Gupta-owned Liberty House had also shown interest in acquiring Tata Steel Europe asset.
Technical reasons
SAAB in a statement on Friday said after deeper analysis and discussions, it became clear that there were limited possibilities to integrate IJmuiden into the SSAB strategic framework. Discussions with Tata Steel have, therefore, concluded, it added.
Martin Lindqvist, President and CEO at SSAB, said it had carefully evaluated Tata Steel IJmuiden and concluded that an acquisition would be difficult for technical reasons.
“We cannot be sufficiently certain that we could implement our industrial plan with the preferred technical solutions as quickly as we would wish. We cannot align Tata Steel IJmuiden with our sustainability strategy in the way desired,” he said.
The synergies that SSAB saw in the transaction would not fully justify the costs and investments required for desired transformation. This means that, overall, the transaction would not meet the financial expectations, he added.
SSAB has set a goal to be the first in the world to supply fossil-free steel to market by 2026 and to be a fossil-free company by 2045.
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