It seems that ThyssenKrupp may go hunting elsewhere …
Who knew that we were in the “lucrative North American market”?
ThyssenKrupp AG, after bowing out of the bidding for Canadian steel producer Dofasco Inc., may seek to acquire other companies in North America to expand outside Europe, analysts said.
“This is not the last we’ve heard of ThyssenKrupp,” said Michelle Applebaum, an independent analyst […] who has followed the steel industry for almost 25 years.
ThyssenKrupp will collect a C$215 million breakup fee when its offer expires Jan. 26. The German company now may turn to other potential acquisitions, such as AK Steel Holding Corp., the biggest U.S. maker of automotive steel, or U.S. Steel Corp., the country’s largest producer, said Applebaum and Chuck Bradford, a steel analyst with Soleil Securities in New York.
Thyssen loses Dofasco but still aims to expand
International Herald Tribune
The German steel maker ThyssenKrupp said on Tuesday that it would seek new opportunities to expand in North America after it quit the bidding for the Canadian company Dofasco, which was acquired by another European giant, Arcelor, after a two-month takeover battle.
ThyssenKrupp’s chief executive, Ekkehard Schulz, said his company would consider building a new steel mill in North America, cooperating with other manufacturers or attempting a different acquisition.
ThyssenKrupp’s board will consider these options at a meeting in May, Schulz said. “It’s too early to call this a defeat,” he added.
Financial markets, which had punished ThyssenKrupp shares as the prospective price for Dofasco increased, cheered the company’s discipline in pulling back from the acquisition.
ThyssenKrupp late Monday said it would not top Arcelor’s bid of 71 Canadian dollars, or $61.67, per share. Schulz said on Tuesday that the bid was “not economically justifiable” above a price of 68 dollars per share. ThyssenKrupp stock closed up 54 cents at E19.26, or $23.66, in Frankfurt trading Tuesday.
Shares of Arcelor, which will pay 5.5 billion dollars for Dofasco, were up 70 cents at E21.61.
The wrangle over Dofasco highlighted how major industry players, notably Arcelor and Mittal Steel of the Netherlands, appear determined to bulk up in an effort to harness economies of scale and negotiate better prices with iron ore producers.
“The global consolidation process in the steel industry is continuing,” Schulz said.
For ThyssenKrupp, that means finding a stronger foothold in the lucrative North American market, he said.
Although American automakers including Ford and General Motors are slashing payrolls and production capacity to cut costs, selling automotive steel in what is still the world’s largest car market remains an attractive proposition. “Better times will come,” said Christian KÃ¶nig, a ThyssenKrupp spokesman.