Swedish steelmaker SSAB called off a deal to take over Tata Steel’s IJmuiden steel mill in Netherlands attributing it to the technical challenges in aligning with Swedish steelmaker’s sustainability strategy. However, Tata Steels confirmed on Friday that SSAB had withdrawn its initial interest, but the company said it was committed to arriving at a strategic resolution for its European portfolio.
In a statement, SSAB said, “After deeper analysis and discussions, it became clear that there were limited possibilities to integrate IJmuiden into the company’s strategic framework”.
With this deal being called off, the re-rating potential and the de-leveraging plans take a hit. Also, following the news, shares of Tata Steel fell as much as 2.57 per cent in trade, declining for the third straight session.
After this, Tata Steels also initiated the process to separate Tata Steels Netherlands and Tata Steels United Kingdom in order to pursue separate strategic paths for both the business in the future.
While announcing the quarter 2 results, steelmaker Tata Steels said that it was in discussions with SSAB concerning a possible acquisition of the IJmuiden steel mill and related downstream assets.
This is not the first time that discussions for a solution to European operations have collapsed. In 2018, Tata Steel had agreed to a 50:50 joint venture with Germany’s Thyssenkrupp, but the European Commission did not approve it.
Tata Steel’s primary steelmaking operations in Europe are IJmuiden (7 million tonnes), Netherlands, and Port Talbot, United Kingdom (3 million tonnes).
