FRANKFURT (Reuters) - German steelmaker Salzgitter SZGG.DE is not discussing any partial or full merger scenarios with larger peer Thyssenkrupp TKAG.DE, its CEO said, adding the group remained open to the idea of consolidation if it makes sense.
Steelmakers in Europe have been roiled by cheap Chinese imports that have hit prices, margins and profits, raising pressure to cut capacity and costs in a bid to remain afloat.
“From my point of view consolidation is not a particularly great vision to create a new company,” Salzgitter CEO Heinz Joerg Fuhrmann told journalists at its annual press conference.
Long-standing speculation about a merger or tie-up of Thyssenkrupp and Salzgitter, the country’s two largest steelmakers, was recently refueled after new Thyssenkrupp CEO Martina Merz said consolidation in the sector made sense.
Fuhrmann said that it was natural to regularly talk to peers and rivals, including the new leadership of Thyssenkrupp.
“But no tie-ups are being talked about, neither of individual segments nor the whole steel divisions,” he said. “I reiterate that until this day it was good for Salzgitter to operate independently.”
The remarks came after Salzgitter posted full-year results, including a loss before tax of 253 million euros ($282 million), burdened by cartel fines and restructuring expenses. Shares in Salzgitter traded down 8.5%.
Fuhrmann said that Salzgitter, which was listed in 1998, would only depart from its current path of independence if it had a better alternative. He admitted there was no guarantee that staying independent was the best recipe for the next 22 years.
“That’s why we are ... prepared, in case there were any such ideas (of consolidation), to talk about them with suitable partners.”
Reporting by Christoph Steitz; Editing by Michelle Martin
Our Standards: The Thomson Reuters Trust Principles.