Salzgitter to take over HKM steel joint venture, end clash with Thyssenkrupp

Germany’s Salzgitter on Friday said it planned to buy out the co-owners of steel joint venture HKM to become the company’s sole owner from mid-2026, potentially ending a dispute with Thyssenkrupp over the future of the ailing business.

A solution around HKM, owned by Salzgitter, Thyssenkrupp Steel Europe (TKSE) and France’s Vallourec in a 50-30-20 split, could end years of uncertainty over the struggling company that employs 3,000 staff.

It could also remove a hurdle in Thyssenkrupp’s ongoing talks to sell TKSE to India’s Jindal Steel International, with HKM’s fate being one of the unsolved issues after the group came under pressure from cheaper rivals and weakening demand.

“The agreement represents an important milestone…setting Thyssenkrupp Steel on an even keel as we move into the future,” TKSE CEO Marie Jaroni said.

Under the plans, Salzgitter would buy the stakes of its co-owners for an undisclosed sum and continue as HKM’s sole owner from June, while also severing HKM’s supply ties with TKSE in 2028, four years earlier than currently planned.

In a joint statement, Thyssenkrupp and Salzgitter – Germany’s two biggest steelmakers – said the agreement depended on a positive assessment of HKM’s future commissioned by Salzgitter, as well as Vallourec agreeing to sell its stake.

French steel tubes maker Vallourec said in a statement it was open to selling its stake in HKM, adding its strategy no longer required participation in the joint venture.

“Vallourec views the agreement reached between (Thyssenkrupp and Salzgitter) as an important step towards a potential divestment. Vallourec will thoroughly analyse the terms of the agreement in the coming days.”

(Reporting by Christoph Steitz and Tom Kaeckenhoff, Editing by Linda Pasquini, Kirsten Donova)