Thyssenkrupp SSAB Deal Could Yield EUR 500 Million Savings
Reuters, citing people reported that Thyssenkrupp and Sweden's SSAB could reap more than EUR 500 million in annual cost savings if they agree on a steel
tie up, that would surpass the level of savings Thyssenkrupp and Tata Steel aimed for in an attempt to merge their European steel divisions, a deal that was blocked by Brussels last year on concerns it would push up prices and reduce competition. People said “Discussions between SSAB and Thyssenkrupp are at an early stage and could still collapse. But it’s the most synergetic of all the options in Europe.”
The main sticking point in talks with SSAB is around 4 billion euros of pension liabilities tied to Thyssenkrupp’s steel business, which the German company wants to bring into a potentially combined firm. Thyssenkrupp could pare down the liabilities ahead of any deal closure by tapping proceeds from the sale of its elevator division.
Thyssenkrupp’s steel business, the second-biggest in Europe by sales, is reeling from weakening demand, cheaper Chinese imports and the botched attempt at a deal with Tata Steel.