MC EXPLAINER How Thyssenkrupp’s steel woes, failed sale attempts, paved the way for Naveen Jindal’s buyout bid

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Billionaire Naveen Jindal's non-binding offer to acquire Thyssenkrupp Steel Europe (TKSE) presents a potential breakthrough for the German conglomerate, which has long struggled to divest its ailing steel business.

The offer via private firm Jindal International, which includes a commitment of over €2 billion toward decarbonization and securing German steel production, comes after a series of failed attempts by Thyssenkrupp to restructure or sell the unit.

A History of Failed Attempts

Thyssenkrupp's efforts to offload its steel division have met with setbacks since 2019, when it floated a proposal to form a joint venture with India's biggest steel producer Tata Steel. However, the deal was later blocked by the  European Commission due to antitrust concerns.

Later in 2021, negotiations with British steelmaker Liberty Steel for a takeover also failed. “We opened the door for negotiations, but in the end our ideas about the corporate value and the structure of the transaction were far apart. We have therefore decided to end the talks," Klaus Keysberg, former Chief Financial Officer of the conglomerate said in a statement back then.

More recently,  in July 2024, Thyssenkrupp sold a 20 per cent stake in TKSE to Czech billionaire Daniel Kretinsky's EPCG, with discussions ongoing for a potential 50:50 joint venture. However, its union  IG Metall, that represent Thyssenkrupp workers, voiced criticism stating that Kretinsky hasn't provided details on his strategic plans.

The latest offer from Jindal Steel  Ltd's foreign unit Jindal International will contest closely with Kretinsky, who has heavily invested in Germany, particularly in its energy and retail sectors.  Thyssenkrupp's deputy supervisory board chairman and senior IG Metall member Juergen Kerner said the news about the offer by Jindal Steel was good news.

TKSE's value and related pension liabilities have been sticking points in past efforts to divest the business, all of which have failed, according to a Reuters report from November 2024.

Mounting Losses and Structural Challenges  

Industrial icon Thyssenkrupp's steel unit has long been the bedrock of Germany's industrial evolution with a history of supplying steel for  factories and railways for more than two centuries, making it Germany's largest steelmaker, followed by  Salzgitter AG and ArcelorMittal Bremen.

However, cheaper Asian competitors, high power prices and a cooling global economy  pressured the business, leading to operating losses in four of the past five years, according to media reports.  The struggles forced the company to write down the value of the unit by €ibn last year, following another impairment of €2.1bn in 2023, according to Financial Times.

The conglomerate is also struggling to decarbonise its steel production due to higher costs of securing renewable energy sources such as green hydrogen. Earlier this year, it paused its efforts to secure green hydrogen for its Duisburg steelworks due to unexpectedly high prices and flagged that its ambitious $3.3 billion green steel project faces the risk of becoming an uneconomical stranded asset unless Germany secures a reliable and affordable source of renewable hydrogen.

Currently,  the company is undergoing a restructuring wherein 40 per cent of its workforce or 11,000 jobs are proposed to be axed. Of the total, 5,000 jobs are to be eliminated by 2030 and the remaining 6,000 jobs through spin-offs or divestitures.. Thyssenkrupp and the IG Metall  reached a collective agreement in July 2025 that included pay cuts for its steelworkers, lower bonus payments, capacity reductions, lower working hours and job reductions, not forced layoffs.

What's in it for Jindal?

Acquiring Thyssenkrupp Steel, Germany's largest flat steel producer with a capacity of 11 million tonnes per year, would instantly make Jindal a top player in Europe.

In January 2025, Jindal Steel International had  acquired Czech steelmaker VÍTKOVICE STEEL to enter the market for rolled sheets and other value-added products. But TKSE deal would become the largest to date if passes through.

Jindal’s bid for steelmaking operations in Europe comes at a time when the continent has planned the imposition of a carbon tax on steel imports. Called the Carbon Border Adjustment Mechanism (CBAM), it will be effective from January 2026. Once CBAM comes in, steelmakers with lower carbon emission intensity will be at an advantage in Europe.