* Deal would combine Europe's No.4 and No. 2 steel cos
* Steel workers to protest on Friday
* Frankfurt-listed Thyssenkrupp shares up 6%
(Recasts, add context)
FRANKFURT/DUESSELDORF, Oct 15 (Reuters) - Privately-held
Liberty Steel Group is set to make a bid for the ailing steel
unit of Germany's Thyssenkrupp as soon as Friday, a
source close to the process told Reuters on Thursday.
A deal would combine the continent's fourth- and
second-largest steelmakers and mark the latest attempt at
large-scale consolidation in Europe after a planned joint
venture between Thyssenkrupp and Tata Steel was
blocked in 2019.
Liberty Steel is a unit of Britain-based conglomerate GFG,
which holds the family operations of commodities tycoon Sanjeev
Gupta.
It has been acquisitive in Europe, most recently in France,
where it bought the Hayange business previously owned by British
Steel.
Active globally, the firm has 13 million tonnes of annual
capacity in Europe, 72% of its total, and employs 17,000 on the
continent, compared with about 27,000 steelworkers at
Thyssenkrupp.
Liberty Steel was formed by Gupta last year and comprises
all of his family's steel activities, with a view to a potential
listing, he told Reuters.
Liberty Steel and Thyssenkrupp, whose Frankfurt-listed
shares closed up 6%, both declined to comment.
News of Liberty Steel's interest, first reported by German
magazine Spiegel, comes a day before planned protests by steel
workers to put more pressure on the government to bailout
Thyssenkrupp's steel unit, which made a nine-month operating
loss of 700 million euros ($819 million).
Thyssenkrupp Chief Executive Martina Merz said earlier this
week the company would consider all options for the unit,
including selling a stake to the German government.
Economy Minister Peter Altmaier has so far opposed the idea
of the government taking a direct stake, and instead favoured
support payments to help the industry transition to
hydrogen-based steel production.
Thyssenkrupp is also exploring tie-ups with Germany's
Salzgitter, Sweden's SSAB and Tata once
again, sources have told Reuters.
($1 = 0.8545 euros)
(Reporting by Christoph Steitz and Tom Kaeckenhoff; Writing by
Emma Thomasson; Editing by Chris Reese, Pravin Char and Toby
Chopra)