Thyssenkrupp Faces Setback as Investor Exits Duisburg Steelworks Negotiations

Thyssenkrupp's steel division has encountered a significant setback as the potential investor for the Hüttenwerke Krupp Mannesmann (HKM) in Duisburg has withdrawn from acquisition discussions. This development raises concerns about the future of the facility, which employs approximately 3,000 workers.

The Hamburg-based investment firm CE Capital Partners has officially terminated negotiations regarding the purchase of HKM. Thyssenkrupp expressed regret over this outcome, emphasizing that the primary objective was to sell the stakes in HKM to secure a sustainable future for the business and its employees.

Thyssenkrupp holds a 50% stake in HKM, while Salzgitter, a steel company based in Lower Saxony, owns 30%, and the remaining shares belong to Vallourec, a French pipe manufacturer. The uncertainty surrounding HKM's future is heightened by the aging infrastructure of the Duisburg facility, which relies on two old blast furnaces that are not environmentally friendly.

As part of its restructuring efforts, Thyssenkrupp aims to divest from its underperforming steel sector. The HKM facility's age and the need for capacity reductions have made its sale a priority. Previously, Thyssenkrupp indicated that if a buyer could not be found, the closure of HKM would be a possible outcome. However, the company has refrained from detailing the immediate implications of CE Capital's withdrawal from the talks, stating that they remain open to discussions with other potential buyers.

The IG Metall union has expressed disappointment over CE's exit from the negotiations, labeling the situation as "unfortunate." Knut Giesler, the deputy chairman of Thyssenkrupp's steel division, indicated that the negotiations faltered due to financial disagreements, with investors reportedly unable to present a viable financial strategy.

According to IG Metall, CE Capital Partners was expected to invest EUR200 million but was not willing to commit those funds. During the negotiation period, there were rumors suggesting that CE sought additional incentives due to years of deferred investments in the facility.

Despite this setback, the union, employee representatives, and stakeholders maintain a degree of optimism regarding a potential future for HKM. A consultancy firm has developed a plan suggesting that HKM could become an independent steel mill capable of marketing its rolled products directly to end-users, particularly for sectors requiring heavy plates, such as the defense industry.

The proposed plan includes replacing the outdated blast furnaces with more environmentally sustainable electric furnaces. IG Metall remains committed to finding a new investor, with Giesler expressing confidence in securing one soon, noting that discussions with potential candidates are already underway.

Sarah Philipp, chair of the North Rhine-Westphalia SPD, also conveyed optimism, highlighting HKM's specialized production capabilities and its ongoing market viability despite the recent challenges.

Information about the now-withdrawn investor, CE Capital Partners, is limited. Led by 37-year-old Nicolas Neumann, the firm has previously been involved in the steel sector, notably acquiring the bankrupt Friedrich-Wilhelms-Hütte in Mülheim and later selling it to Krauss-Maffei Wegmann.