SSAB leaves Dutch assets acquisition talks with Tata Steel

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METALS & MINING

Sweden's SSAB has ended talks with India's Tata Steel over the possible acquisition of the company's Ijmuiden steel mill in the Netherlands following nearly three months of negotiations, citing the "limited possibilities" available for the integration of the Dutch plant into SSAB's strategic framework.

“We have carefully evaluated Tata Steel IJmuiden and have concluded that an acquisition would be difficult for technical reasons. We cannot be sufficiently certain that we could implement our industrial plan with the preferred technical solutions as quickly as we would wish. We cannot align Tata Steel Ijmuiden with our sustainability strategy in the way desired,” says Martin Lindqvist, President and CEO at SSAB.

Read more: Tata Steel & SSAB in talks over "potential" sale of Dutch arm

“The synergies that we saw in the transaction would not fully justify the costs and investments required for our desired transformation. This means that overall, the transaction would not meet our financial expectations,” he added.

The statement also said that SSAB is one of the key companies pushing for the transformation of the steel industry towards fossil-free production and has the aim of being the first steel company in the world to supply fossil-free steel by 2026 and to be completely fossil-free as a company by 2045.

"We cannot be sufficiently certain that we could implement our industrial plan with the preferred technical solutions as quickly as we would wish. We cannot align Tata Steel Ijmuiden with our sustainability strategy in the way desired,” said Lindqvist.

Read more: Operations begin at Sweden's HYBRIT fossil-free steel plant

The news will come as a blow for Tata. The divestment was meant to reduce the company's debt significantly

In a separate statement, Tata confirmed that SSAB had officially withdrawn its interest in the Dutch facility. 

“However, Tata Steel wishes to confirm that it is committed to arriving at a strategic resolution for its European portfolio. Tata Steel’s IJmuiden plant is among the most environmentally efficient and cost-competitive steel producers in Europe," the statement said.

Shares in the Indian steel giant dropped by 3.68% on the BSE when the news broke.

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