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Czech billionaire Kretinsky sells Thyssenkrupp stake after JV plans fail

The Czech billionaire Daniel Kretinsky agreed to sell his 20 percent stake in Thyssenkrupp’s steel business and scrap plans for joint venture, according to a statement released by both parties. This could pave the way for an agreement with Jindal Steel.

The sale of the stake ends long-running discussions about what could have been a German and Czech steel and energy giant. Discussions that have made no measurable progress since Kretinsky purchased a fifth in Thyssenkrupp Europe (TKSE) late last year.

Thyssenkrupp shares, which had earlier reached a high of six years, briefly fell on the news, before recovering and trading 1.6% higher by 1042 GMT.

Thyssenkrupp can now move forward with its talks with India's Jindal Steel International. Jindal Steel International last month made an indicative offer for the entire TKSE business, a volatile one that its parent had been trying to sell for years.

The statement stated that Kretinsky’s EP Group “respects Thyssenkrupp's AG preference to focus on discussions with Jindal Steel International” and that the purchase price paid by Kretinsky’s EP Group to Thyssenkrupp to acquire the TKSE shares would be reimbursed.

People familiar with the situation estimate the price at approximately 140 million Euros ($164 million).

This news comes at a time when uncertainty is growing about the future of steelmaking in Europe. The sector is battling with low-cost Chinese imports, rising energy costs, and a delayed decarbonisation based on hydrogen of one of the most pollution industries.

The EP Group of Kretinsky and Thyssenkrupp aimed to form a joint venture with TKSE that would be 50/50. However, the talks have proved difficult as powerful unions accuse the Czech businessman for refusing engagement. $1 = 0.8511 Euros (Reporting and Editing by Matthias Williams, Louise Heavens, and Matthias Steitz)

(source: Reuters)