German conglomerate Thyssenkrupp ended talks to sell its steel division to Britain's Liberty Steel due to differences over value, the latest setback in efforts to consolidate the European sector.

Liberty Steel, led by commodities tycoon Sanjeev Gupta, last month submitted a firmed-up non-binding bid for Thyssenkrupp's steel unit, Europe's second biggest in terms of sales, which sources said included commitments to protect jobs and sites.

Thyssenkrupp's move to terminate talks shifts the focus to the group's two other scenarios for its steel division: keeping it or spinning it off to shareholders. Both would entail major additional cost and job cuts.

"The steel business of Thyssenkrupp needs to be realigned and adjusted," the Alfried Krupp von Bohlen und Halbach foundation, Thyssenkrupp's top shareholder, said. "Thyssenkrupp has no time to spare."

The move comes after Sweden's SSAB last month abandoned plans to buy the Dutch operations of India's Tata Steel, a sign of just how challenging consolidation is in a sector plagued by overcapacity.

In an internal memo to staff, Thyssenkrupp Chief Financial Officer Klaus Keysberg said differing views over the value of the division, financing structure and guarantees were the key reasons to end discussions.