Liberty Steel Group, owned by Indian-British billionaire Sanjeev Gupta, said Friday it had made a non-binding bid to acquire Thyssenkrupp's steel unit.

In a statement, the privately-held firm said it was "open to intensify the dialogue with Thyssenkrupp and would like to engage in further due diligence to present a potential binding offer."

The London-based Liberty said that it is "convinced that a combination with Thyssenkrupp Steel Europe can be the right answer from an economic, social, and environmental perspective."

Read more: Governments 'turn a blind eye' to foreign bribery: Transparency International

The move follows speculation about potential rival bids. German weekly magazine Der Spiegel reported earlier that Thyssenkrupp was in discussions with Tata Steel and Sweden's SSAB over a potential sale.

Europe's steel sector is struggling with oversupply, fierce Chinese competition and the economic fallout from the coronavirus pandemic.

Thyssenkrupp CEO Martina Merz has even mooted calling for state subsidies to shore up the unit.

German steelworkers protest

Amid concerns about large-scale job cuts, Thyssenkrupp workers belonging to German union IG Metall held a demonstration Friday to demand a rescue package from Berlin.

The country's largest union expressed concern over the bid, with board member Jürgen Kerner saying a takeover would not solve any of the loss-making steel division's problems.

"We do not need a new owner, we need additional capital, and Liberty does not have that either," he said.

Thyssenkrupp shares have risen 24% over the past day, compared with a rise of 0.6% for the rest of the DAX index.

The bid marks the latest attempt at consolidation in the European steel market after Thyssenkrupp failed to achieve a merger with India's Tata after it was blocked by the European Commission last year.

Liberty is a global steel and mining business with annual revenues of about $15 billion (€13 billion), employing 30,000 staff in more than 200 locations worldwide.

However, the firm has also suffered a drop in demand for its UK steel products owing to cheap Chinese imports.

Liberty's bid comes nearly a year after Chinese industrial giant Jingye Group agreed to buy bankrupt British Steel in a rescue deal.

mm/rs (AFP, dpa)