9/20/2017, 7:51 AM (Source: TeleTrader)
more TeleTrader news

ThyssenKrupp, Tata merge European steel operations

German company ThyssenKrupp and India's Tata Steel have signed a memorandum of understanding on Wednesday that will combine their European steel operations in a 50/50 joint venture, resulting in the second largest steel producing company in Europe after ArcelorMittal. It is expected that a final deal to the merger will be signed in early 2018, while the effective start of the joint venture could take place in late 2018.

The new entity named ThyssenKrupp Tata Steel is projected to record sales of about €15 billion and a workforce of about 48,000, currently at 34 locations, while shipments are expected to be about 21 million tons a year. The joint venture will be managed through a holding company based in Netherlands. Partners expect annual synergies of between €400 million to €600 million. However, it is projected that up to 2,000 workers in the administration and 2,000 in production will lose their jobs as a result of the deal, the burden that will be shared roughly evenly between the partners.

"Under the planned joint venture, we are giving the European steel activities of ThyssenKrupp and Tata a lasting future. We are tackling the structural challenges of the European steel industry and creating a strong No. 2" ThyssenKrupp's CEO Heinrich Hiesinger stated.

Breaking the News / FH