Salzgitter takes over HKM Steel joint venture to end conflict with Thyssenkrupp

Germany's Salzgitter announced on Friday that it would buy out all the shareholders of the steel joint venture HKM, becoming the sole owner of the company by mid-2026. This could end a dispute between Thyssenkrupp and Salzgitter over the future of this ailing business.

It could be the solution to end years of uncertainty for the struggling company, which employs 3,000'staff. This could also be a way to remove a barrier in Thyssenkrupp’s ongoing discussions to sell TKSE India’s Jindal Steel International.

The agreement is an important milestone...it puts Thyssenkrupp on a level keel for the future, said TKSE CEO Marie Jaroni. Salzgitter will buy out its co-owners' stakes at an undisclosed amount and become HKM's sole owner in June. HKM supply ties to TKSE will also be severed four years sooner than planned.

Thyssenkrupp, one of Germany's largest steelmakers, and Salzgitter said in a joint statement that the agreement was dependent on a positive assessment by Salzgitter about HKM's prospects, as well as Vallourec's willingness to sell its stake.

French steel tubes manufacturer Vallourec stated in a statement that it is open to selling its share in HKM. It added that its strategy does not require participation in the joint venture.

"Vallourec sees the agreement between (Thyssenkrupp) and Salzgitter as an important step toward a possible divestment." Vallourec is going to thoroughly analyze the agreement's terms in the next few days. (Reporting and editing by Linda Pasquini and Kirova Donova, with Tom Kaeckenhoff).

(source: Reuters)