FRANKFURT (Reuters)
Thyssenkrupp (DE:TKAG), Germany's biggest steelmaker, confirmed on Sunday that it is in talks with India's Tata Steel (NS:TISC) about a consolidation of beleaguered European steel mills that are hit by overcapacity, weak demand and cheap imports.
Tata
Steel said on Friday it had suspended the process of selling its
troubled UK arm while it held talks with potential partners, including
Thyssenkrupp, about alternative and more sustainable solutions for its
entire European business. In addition to its UK operations Tata Steel
Europe also owns the former Hoogovens steel plant in the Netherlands.
Thyssen
spokeswoman Nicola Roettger, contacted by Reuters, said on Sunday her
company has long said it believes that a consolidation of the European
steel industry is necessary, due to the extremely difficult economic
situation.
"We
have also said already that in such a situation, everybody's talking to
everybody else. Among other (conversations), we are also talking to
Tata Steel," she said.
She said it was to be left open for now
if, when, and with whom further steps would be taken. More specific
statements would be made only if decisive progress towards consolidation
could be made.
Tata had said in a statement on Friday that the
talks, which could include a possible joint venture, were at a
preliminary stage and the European approach was in addition to its
attempts, launched in March, to sell its main British steelmaking
operations, which include its Port Talbot blast furnace plant in
southern Wales.
The firm said the British vote to leave the
European Union, and the outcome of the UK government's consultation on
Tata Steel UK's British Steel pension scheme, had prompted a rethink on
the sale.
"Consequently, Tata Steel has now entered into
discussions with strategic players in the steel industry, including
Thyssenkrupp," the Indian company said.
However, Thyssenkrupp has said in the past it is not in a position to spend cash on a merger.
