Thyssenkrupp CEO says Liberty Steel bid needs clarification

FRANKFURT (Reuters) - A bid which Britain’s Liberty Steel submitted for Thyssenkrupp’s steel division in January must be clarified in ongoing talks between the two firms, the German group’s chief executive said.

FILE PHOTO: A crane operator lifts up a finished steel coil at the storage and distribution facility of the German steel maker in Duisburg, Germany, January 30, 2020. REUTERS/Wolfgang Rattay

The bid still contains “a number of complex aspects that require further clarification”, Martina Merz said in a speech prepared for the group’s annual general meeting scheduled for Feb. 5. “We are in discussions with Liberty Steel to this end.”

Liberty Steel submitted what it called a firmed-up bid for Thyssenkrupp’s steel division, pledging to honour existing labour agreements as well as securing increased financial leeway to fund the transaction.

Merz did not elaborate on the sticking points, which include about 4 billion euros ($4.83 billion) of pension liabilities tied to Thyssenkrupp’s steel unit and the question of whether all or parts of that can be transferred as part of a transaction.

Merz said Thyssenkrupp aims to decide on whether to sell or keep the division in March, adding alternatives to a sale include spinning off the unit or retaining it as part of the group.

“Our ultimate goal is to ensure the future viability of steel and thus safeguard our employees’ prospects. In our view, this is more important than the question of ownership,” Merz said.

Thyssenkrupp shares were 2.7% higher.

Merz stopped short of suggesting she was seeking to revive talks with other steelmakers, only days after discussions between India’s Tata Steel and Sweden’s SSAB, both seen potential partners, broke down.

SSAB ended discussions with Tata Steel about a purchase of the Indian firm’s Dutch assets due to the costs required to decarbonise production, sources close to the deal said, an issue that could also arise in talks between Thyssenkrupp and Liberty.

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Editing by Thomas Seythal and Jason Neely