German conglomerate Thyssenkrupp ended talks to sell its steel division to Britains Liberty Steel due to differences over value, the latest setback in efforts to consolidate the European sector.
Liberty Steel, led by commodities tycoon Sanjeev Gupta, last month submitted a firmedup nonbinding bid for Thyssenkrupps steel unit, Europes second biggest in terms of sales, which sources said included commitments to protect jobs and sites.
We regret this step because we perceived Liberty Steel as a serious partner in the process, Thyssenkrupp Chief Financial Officer Klaus Keysberg said in a statement.
Thyssenkrupps move to terminate talks shifts the focus to the groups two other scenarios for its steel division keeping it or spinning it off to shareholders. Both would entail major additional cost and job cuts.
Shares in the company were almost unchanged at 0837 GMT after falling as much as 6.2.
To end talks also shows a position of strength, a local trader said, adding Thyssenkrupps steel unit had improved markedly in recent months.
The move comes after Swedens SSAB last month abandoned plans to buy the Dutch operations of Indias Tata Steel, a sign of how challenging consolidation is in a sector plagued by overcapacity.
In an internal memo to staff, Keysberg said differing views over the value of the division, financing structure and guarantees were the key reasons to end discussions.
Overall, ideas were so far apart that continuing discussions wouldnt have gotten us…