India’s man of steel bids for Thyssenkrupp
German industrial giant Thyssenkrupp’s steel business was once its pride and joy, but low demand, cheap imports from Asia and high energy costs have taken their toll.
The company was exploring a deal to sell half of its steel operations to Daniel Křetínský, but there’s been little word from the Czech billionaire since his EP Group took a 20 per cent stake in the business last year.
Then on Tuesday last week, Indian metals magnate Naveen Jindal made a surprise bid for the steel unit, shaking up proceedings and setting up a showdown with Křetínský.
It’s a characteristically bold move from the 55-year-old, polo-playing chair of Jindal Steel, who’s known on the field as “Captain Cool”.
While the value of his bid was undisclosed, Jindal has promised to invest more than €2bn into the steel unit.
In Jindal Steel, he owns India’s fourth-largest producer of the alloy. And flush with cash, the group has embarked on an expansion that could put it in the big leagues of steelmakers globally.
Jindal Steel’s assets include mines in Africa and Australia and steel plants in Oman and Europe. At the start of this year, it closed its acquisition of Vítkovice Steel, an 800,000-tonne-per-year manufacturer in Křetínský’s homeland.
The bid for the German steel unit is a risky ploy: Thyssenkrupp was forced to write down the value of the unit by €1bn last year. That came after a €2.1bn impairment in 2023, and the steel division has pension liabilities of about €2.7bn.
Yet you don’t have to look too far to see the benefits a successful takeover could bring.
Europe is re-arming and defence spending is on the up. If the Indian tycoon can mimic his success at Jindal Steel, where shares have risen fivefold in as many years, he could net a fortune.