India’s Tata, Thyssenkrupp announce merger of European steel operations

Tata and ThyssenKrupp will finalize the deal in 2018. (AFP)

BERLIN: Industrial conglomerate ThyssenKrupp and Indian group Tata have agreed to merge their steel operations in Europe, aiming to take second place in the market behind ArcelorMittal, the two companies said in a statement Wednesday.
The two conglomerates, which will finalize the deal in 2018, expect annual synergies of between €400 million and €600 million and are likely to get rid of 4,000 jobs in production and administration.
The new company, to be named Thyssenkrupp Tata Steel, would be headquartered in or near Amsterdam, Thyssenkrupp said in a statement on Wednesday after the two companies signed a memorandum of understanding (MoU).
“Under the planned joint venture, we are giving the European steel activities of Thyssenkrupp and Tata a lasting future,” Thyssenkrupp CEO Heinrich Hiesinger said. “We are tackling the structural challenges of the European steel industry and creating a strong No.2.”
The MoU will be followed by negotiations about the details of the transactions as well as due diligence – a detailed look at each other’s accounts – before a joint venture contract can be signed at the beginning of 2018, Thyssenkrupp said.
The signing of the joint deal will require the approval of Thyssenkrupp’s supervisory board and Tata Steel’s board of directors as well as that of the European Commission.