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GMH says owner is no supporter of plan for German steel champion
August 24, 2017 / 9:13 AM / 3 months ago

GMH says owner is no supporter of plan for German steel champion

DUESSELDORF/FRANKFURT (Reuters) - Juergen Grossmann, owner of German steel firm Georgsmarienhuette (GMH) and a former CEO of utility RWE (RWEG.DE), has distanced himself from a report saying his group could play a key role in the country’s steel sector consolidation, a spokeswoman said.

German business daily Handelsblatt reported earlier that Grossmann was exploring plans to form a “German Steel AG” to prevent a potential merger of Thyssenkrupp’s (TKAG.DE) European steel activities with those of Tata Steel (TISC.NS).

Thyssenkrupp has been in talks with Tata Steel over the deal for more than a year, with progress expected to be made soon, after the Indian group has struck a deal to cut its UK pension scheme liabilities earlier this month.

“Mr Grossman has told the Handelsblatt that he is not a supporter of a German Steel AG,” a spokeswoman for GMH told Reuters on Thursday.

Handelsblatt had said such a German steel champion could consist of Grossmann’s GMH, Thyssenkrupp’s steel unit and, possibly at some point in the future, Salzgitter (SZGG.DE), citing company sources.

A spokesman for Salzgitter said the group rejected the idea of a German Steel AG. A spokeswoman for Lower Saxony, which owns a 25 percent stake in Salzgitter, said there were no plans to merge Salzgitter with either Thyssenkrupp or Georgsmarienhuette.

“The government would also not look favourably upon such plans in any way and would not support such an approach,” she said. Thyssenkrupp declined to comment.

Shares in Thyssenkrupp and Salzgitter were 0.3 percent and 0.4 percent lower, respectively, slightly underperforming a 0.3-percent rise in the German benchmark index .GDAXI.

A Frankfurt-based trader described the report as “pre-election noise as politicians oppose a Tata deal due to job cut fears, as the labour unions already do.”

Reporting by Tom Kaeckenhoff and Christoph Steitz; Editing by Maria Sheahan

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