Swedish steel group SSAB has pulled out of talks on taking over the IJmuiden operations of Tata Steel, saying that the Dutch operation could not be made to operate to its sustainability standards.

In November, Tata confirmed that the Dutch and British arms of its operations are to be separated and that it had initiated discussions with SSAB about it acquiring Tata’s Dutch business, including IJmuiden steelworks.

‘We have carefully evaluated Tata Steel IJmuiden and concluded that for technical reasons we have difficulty in carrying out an acquisition,’ SSAB chief executive Martin Lindqvist said in a website statement. ‘We cannot adapt Tata Steel IJmuiden to our sustainability strategy in the desired way… Overall, the deal does not meet our financial expectations.’

Tata Steel is considered an essential industry in the Netherlands and is outperforming the British arm, even though turnover has dropped 20% because of problems facing the car industry.

Tata Steel is pressing ahead with the separation of the two arms, but has not yet said if it is looking for a new buyer for the Dutch operations.