Thyssenkrupp, the German steel giant, could be cut to junk for the second time in three years by ratings agency Standard & Poor's if its improved takeover bid for Canadian rival Dofasco succeeds.

Thyssenkrupp, which hit out at S&P in February 2003 after it was named among several European companies the rating agency downgraded over its pension scheme, had its low triple-B rating - the lowest investment grade rating - placed on watch with negative implications by S&P yesterday.