Salzgitter’s Strategic Stand: Choosing Self-Reliance Over Succession
In a firm move to preserve its autonomy, Salzgitter AG, one of Europe’s oldest and most innovative steel companies, has announced the termination of discussions with a takeover consortium consisting of GP Günter Papenburg AG and TSR Recycling GmbH & Co. KG. This decision was not made lightly. Following extensive internal review and external consultations, the Executive Board concluded that the valuation gap between what the consortium was offering and what Salzgitter believed its present and future worth to be was simply too wide to bridge.
The consortium had been exploring an acquisition deal, potentially reshaping the competitive landscape of Germany's steel industry. However, Salzgitter's leadership chose to reinforce its independence, standing firm behind its technological evolution and stakeholder-driven transformation roadmap.
CEO Gunnar Groebler’s Declaration of Intent
In an assertive statement, Gunnar Groebler, CEO of Salzgitter AG, emphasized the strategic imperative of remaining independent:
"Salzgitter AG will remain an independent company. Backed by the combination of technological strength, entrepreneurial responsibility, and decades of expertise, we will continue to drive our transformation forward."
Groebler made it clear that this decision aligns with the vision of Salzgitter AG’s management and stakeholders. The company has already laid the groundwork for this transformation in the previous year and is now accelerating its efforts.
P28 Performance Program: Doubling Down on Efficiency
One of the key pillars of this renewed independence is P28, an expansion of Salzgitter’s earlier cost-efficiency initiative, Performance 2026. The program originally aimed at saving €250 million but has now been expanded to €500 million in targeted savings.
By the end of 2024, the company had already achieved €130 million in cost reductions. These savings result from strategic restructuring, optimization across manufacturing processes, digitalization efforts, and workforce alignment.
The P28 program is not just about cutting costs. It is designed to simultaneously improve earnings, enhance productivity, and boost the competitiveness of Salzgitter's diverse business units.
SALCOS® – Green Steel for a Green Future
The most transformative project underway at Salzgitter AG is SALCOS® (Salzgitter Low CO₂ Steelmaking). This visionary program aims to replace traditional carbon-intensive steel production with hydrogen-based methods, moving toward nearly zero-emission steel by the year 2033.
The first stage of the SALCOS® transformation comes with a €2.3 billion investment. The modular setup of the program gives the company flexibility to adapt and invest at the right time, depending on market trends, regulatory frameworks, and available infrastructure.
SALCOS® has the potential to make Salzgitter AG a European leader in green steel, aligning with EU decarbonization goals and securing its place in an increasingly eco-conscious industrial economy.
Defense, Infrastructure & Policy: Growth Sectors in Focus
Salzgitter AG is also setting its sights on high-growth sectors like defense and infrastructure, both of which are poised for expansion due to shifts in German government policies.
To that end, the company has created a dedicated defense taskforce, which has already garnered attention from key players in the national defense ecosystem. Salzgitter’s production of specialized steel pipelines for natural gas, hydrogen, and carbon capture applications makes it uniquely positioned for Germany’s massive infrastructure investments.
The incoming German government’s economic policy, focusing on climate protection, modernization, and national security, is expected to create significant demand for Salzgitter’s steel and engineering capabilities.
Portfolio Realignment: The ‘Best-Owner’ Philosophy
While pursuing internal growth, Salzgitter AG also continues to evaluate its corporate portfolio through the “best-owner principle.” This means assets are only retained if the company believes it is best positioned to operate and develop them.
Last year, Salzgitter successfully completed the sale of the Mannesmann Stainless Tubes Group, freeing up capital and management resources for core strategic areas. The Executive Board has committed to continuously reviewing other assets and business units under the same guiding principle.
This approach ensures a leaner, more focused company structure, aligning each unit with overarching corporate objectives and financial performance goals.
Commitment to Long-Term Value Creation
Summing up the company’s trajectory, CEO Groebler stated:
"The aim of all these activities is to ensure the best possible positioning for Salzgitter AG in the competitive arena, to continue the transformation we have successfully begun, and to generate long-term value for our shareholders, customers, and employees.”
The message is clear: Salzgitter AG is not just rejecting a takeover; it is forging a stronger, greener, and more agile future under its own leadership.
Key Takeaways:
• Salzgitter AG has ended takeover discussions with GP Günter Papenburg AG & TSR Recycling GmbH
• Disagreement over valuation was the primary reason for the talks collapsing
• Salzgitter AG affirms independence, aligning with its stakeholders and future vision
• CEO Gunnar Groebler commits to self-driven transformation
• P28 performance program expanded to €500 million in savings; €130 million already realized by end of 2024
• SALCOS® project launched to create hydrogen-based, nearly carbon-free steel by 2033
• €2.3 billion investment in SALCOS® marks one of Europe’s largest green steel transitions
• Defense sector taskforce established, attracting new clientele amid rising geopolitical focus
• Expertise in infrastructure pipelines (natural gas, hydrogen, CO₂) supports strategic growth areas
• German government’s new economic policy expected to boost Salzgitter’s core markets
• Mannesmann Stainless Tubes Group divested in 2024, part of best-owner portfolio strategy
• Ongoing review of non-core assets continues to keep company agile and future-ready
