German steelmaker ThyssenKrupp
ThyssenKrupp, whose business stretches from submarines to lifts and car components, is looking to sell non-core assets with revenues of 10 billion euros ($12.7 billion) to help repay debts, which stood at 3.6 billion euros as of end September.
The tough market for stainless steel, used in everything from cutlery to rail cars, has prompted major steelmakers to reconsider their involvement in an industry that is battling with competition from Asia, overcapacity and the consequences of an economic downturn. Giant ArcelorMittal
We have started talks with Outokumpu, a spokesman for ThyssenKrupp said on Monday.
Two people close to the talks told Reuters ThyssenKrupp was aiming for a complete sale of its stainless steel unit, but no decision has been made yet.
ThyssenKrupp has been in talks with Outokumpu for some time already, one of the people said.
The company's supervisory board still needed to approve a sale, the sources said.
Outokumpu declined to comment on the matter.
Its shares leapt 17 percent in early morning trade, while ThyssenKrupp's were little changed.
ThyssenKrupp has said it aimed to divest its stainless steel business by around the end of 2012 and was considering a flotation, sale or a spin-off.
The unit, Inoxum, posted sales of around 5.9 billion euros ($7.6 billion) in the 2009/10 fiscal year. It comprises plants in Germany, Italy, Mexico, China and the United States employing around 11,300 people.
ThyssenKrupp last year mandated Citigroup
($1 = 0.7740 euros)
(Additional reporting by Jussi Rosendahl in Helsinki; Writing by Maria Sheahan, Editing by Mark Potter)