Swedish firm SSAB today pulled out of talks to buy Tata Steel’s Dutch assets in a blow to the multinational conglomerate.
Back in November talks between the two sides began after Tata indicated it was looking to break up its European operations.
Under the plans, the firm said it would make its facilities at Port Talbot in Wales “self-sustaining”, triggering fears over the future of the assets.
But now the plans have suffered a setback after SSAB concluded that acquiring the IJmuiden site would be “difficult for technical reasons”.
Chief executive Martin Lindqvist said: “The synergies that we saw in the transaction would not fully justify the costs and investments required for our desired transformation.”
SSAB is pivoting towards a more environmentally friendly business model, and it is understood that there were concerns that Tata’s plant would not fit in with this.
Analysts had valued a potential deal at around €2 to €3bn.
Potential Swedish ownership of Tata’s Dutch plant has led to considerable alarm over the future of the Port Talbot site, which currently employs about 8,000 workers.
The steelworks has been asking for emergency government support for months, but none has thus far been forthcoming.
Even before the coronavirus pandemic hit, Tata Steel UK made a pre-tax loss of £654m for the previous financial year.