Economy & Politics

ColumnNo serious bidder for Thyssenkrupp

Capital columnist Bernd Ziesemer
Personal-Financial.com columnist Bernd ZiesemerMartin Kress

Actually, last week’s teleconference with financial analysts was about the figures for the past quarter, but the head of the steel company SSAB also used the opportunity to publicly move away from Thyssenkrupp: his company was “not involved in a bidding process for the steel division of the Essen-based company involved”. The cancellation of the Swedes in all likelihood ends the dream of a serious solution for the ailing group. In the industry, SSAB was the only European company that was successful and financially strong enough to absorb the German blast furnaces.

The alleged alternatives, which Thyssenkrupp invokes verbatim over and over again, turn out to be aerial numbers on closer inspection. A state company from China? Politically not to be mediated in Germany. The Russians? Do not show any serious interest in the steel division and would also hardly be politically desirable. The entry of the German state? Wouldn’t solve a single problem, just socialize private losses.

In the end, there is likely to be a choice between plague and cholera. There is the full-bodied offer from Liberty Steel, which obviously speculates on a huge financial dowry from the parent company and also wants to tap high German subsidies. With completely opaque structures, a history of extremely opaque financing and an autocratic leadership culture, a bid for Liberty would be like a gamble in which nobody knows the cards of the Indian CEO Sanjeev Gupta.

Will Thyssenkrupp and Tata get together again?

There really is only one other Indian company left: Tata. After the failure of the first merger a year ago, this solution seems unlikely at first glance. However, the veto of EU competition watchdog Margrethe Vestager need not be the last word on this matter. The main argument against the merger at the time – the danger of massively rising steel prices in Europe – can no longer be taken as seriously in the current situation as it was back then. In the meantime, nobody in Brussels can really doubt that Thyssenkrupp Steel is to be understood as a restructuring case to which one must apply different standards than a normal merger. Conversely, many concessions on the part of the two companies, which they were vehemently reluctant to make a year and a half ago, may now be possible in the current crisis.

There can be no doubt about one thing: Compared to Liberty, the Tata Group would be a much more sensible partner. The German trade unions, which at the time were on a course of confrontation with Tata, should now see that too. One thing is clear: At Thyssenkrupp there will be further job cuts one way or another. And location closings in Europe also seem inevitable. The only question is who is executing the austerity programs. IG Metall is still officially opposed to this knowledge and instead propagates the sham solution of joining the state. But it is high time to rethink. How do you say in the Ruhr area? Better the sparrow in hand than the pigeon on the roof.


Bernd Ziesemer is a capital columnist. The business journalist was editor-in-chief of the Handelsblatt from 2002 to 2010. He was then managing director of the corporate publishing division of the Hoffmann und Campe publishing house until 2014. Ziesemer’s column appears regularly on Personal-Financial.com. You can follow him on Twitter here.


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