Arkan Building Materials Company (ARKAN) PJSC (ADX:EMSTEEL) has walked away from a potential investment in thyssenkrupp AG (XTRA:TKA)?s steel business, a source familiar with the matter told Reuters. The state-backed firm stopped actively pursuing a deal due to concerns over pension liabilities and other complexities of the business, the source said. Emirates Steel was considering buying a stake in the Thyssenkrupp unit, which has seen interest from other bidders including India?s JSW Steel Ltd. also wane, the source added.

A spokesperson for Thyssenkrupp declined to comment. Bloomberg was first to report the news on July 27, 2023. The German conglomerate is exploring various options for its steel division, which management sees as a drag on performance due to its cyclical nature.

Previous efforts to merge the division with a peer, sell it to a rival, list it or spin it off have all failed.