Germany-based SMS Group became the sole owner of Paul Wurth, a Luxembourg industrial company that produces steel industry equipment, after acquiring shares belonging to the state (10.9%), the Spuerkeess (10.9%) and public lender SNCI (18.8%).

The value of the transaction was not disclosed, although economy minister Franz Fayot (LSAP) called it “appropriate and attractive.” Part of the funds will be transferred to the Luxembourg intergenerational fund, a sovereign wealth fund aimed at generating public savings for future generations.

The state will keep two seats on Paul Wurth’s board of directors.

SMS is planning on regrouping research on decarbonisation and steel recycling in Luxembourg as well as reinforcing metallurgy and hydrogen technology innovation.

“Green steel represents a huge transformation for our customers. For 150 years, SMS and Paul Wurth have set technological standards in the steel industry and have already worked together very successfully in recent years. By pooling our skills, we ensure that SMS and Paul Wurth remain synonymous with innovative and sustainable solutions,” said Paul Wurth CEO Georges Rassel during a press conference on 21 April.

Edwin Eichler, president of SMS Group, said steelmaking will fundamentally change over the coming decades with the blast furnaces and coking plants of today to disappear. Digitalisation, too, will become more important, he said.

“This upheaval of the global steel industry is the right time for Paul Wurth and SMS to unite their metallurgical expertise within a single provider of integrated solutions,” Eichler said.

Labour unions OGBL and LCGB had initially opposed Paul Wurth passing into foreign ownership, fearing job losses. “There are positive signs,” said Robert Fornieri or the LCGB’s steel industry branch.

“We met the economy minister and the management of Paul Wurth who committed to uphold the level of employment. It is positive to see the state represented on the board. But we still remain vigilant, because SMS Group is also going through a restructuring that is not finished,” he said.

CEO Rassel assured that nothing would change at the company’s different outfits, including TMT, CTI and its incubator. “The subsidiaries have good results despite the current context so there is no reason to change anything,” he said.

For now, the state will continue owning the land of the Paul Wurth site. The company’s real estate activities will be transferred into a new company in which the former Luxembourg public stakeholders and SMS will hold equal shares.

This story was first published on Paperjam and has been translated and edited for Delano.