By Johannes Hellstrom and Bart H. Meijer
STOCKHOLM/AMSTERDAM (Reuters) - Swedish steelmaker SSAB (ST:SSABa) is in talks with Tata Steel (NS:TISC) about potentially buying the Indian group's IJmuiden steel mill in the Netherlands and related assets, it said on Friday.
"SSAB has participated in several different discussions concerning consolidations in the European steel industry," the company said. "The discussions with Tata are on-going but no decisions have been made."
SSAB said there was no guarantee a deal would materialise, and did not give further details.
The news comes as European steelmakers are looking for ways to restructure their businesses in the face of over-capacity, cheap Chinese imports and the fallout from the COVID-19 crisis, which has made it virtually impossible for them to turn a profit.
Talks have been held among all major European players and sources said last week that SSAB was eyeing Tata Steel's IJmuiden site while also pursuing talks with Germany's Thyssenkrupp (DE:TKAG) over a deal.
An SSAB-Tata Steel deal would narrow consolidation options for Thyssenkrupp, Europe's No.2 steelmaker after ArcelorMittal (LU:MT).
The German group, which has held talks with both SSAB and Tata Steel, is currently reviewing a non-binding indicative offer for its steel business from Britain's Liberty Steel.
Tata Steel has been looking to overhaul its European steel business for a while, but its most promising scenario - a proposed 50-50 joint venture of the business with that of Thyssenkrupp - was blocked last year on antitrust grounds.
The Indian steelmaker said on Friday it had begun a process to separate its European division, comprising Tata Steel Netherlands and Tata Steel UK, adding it would pursue separate strategies for the two units.
The company said it continued to discuss possible state aid with the British government for its UK business, which includes its ailing Port Talbot plant in Wales, adding it was reviewing "all options to make the business self-sustaining".