New Delhi/Mumbai, Oct. 12 -- Hefty pension obligations and workforce reorganization have emerged as key issues in Naveen Jindal's bid to acquire thyssenkrupp Steel Europe (TKSE), as discussions continue over the Indian billionaire's potential role in the German steelmaker's turnaround plans, according to two people familiar with the matter.

At the heart of the negotiations is how to manage TKSE's pension liabilities, estimated at €2-3 billion, and a potential workforce restructuring plan that could involve significant layoffs. Both issues have long deterred buyers and complicated thyssenkrupp's efforts to offload its loss-making steel unit.

The European steel division accounts for roughly €2.7 billion, or about half of thyss...