21 September, 2017
'We cautiously welcome the announcement that Tata has signed an MOU with ThyssenKrupp regarding a potential joint venture.
Dr. Heinrich Hiesinger, chairman, executive board, thyssenkrupp, said that both businesses were creating a sustainable future for their respective European steel activities, creating ' a strong number two' on the global stage, capable of coping with the structural challenges of the European steel industry.
The deal creates a strong and clean balance sheet, coupled with strong products and research and development capabilities to grow, Mr. Chandrasekaran said.
The two groups, which will finalise the deal in 2018, expect efficiency savings of between 400 and 600 million euros ($480-720 million) per year and are likely to shed 4,000 jobs in production and administration.
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IG Metall union, which represents metalworkers in Germany, is concerned the joint venture could pave the way for ThyssenKrupp to exit the steel business entirely.More news: Democrats to study every option to halt Obamacare repeal bill
Earlier, labor representatives, who have half of the seats on Thyssenkrupp's supervisory board, had also expressed concern over job losses.
Tata, the Indian conglomerate that operates the Port Talbot steelworks, and Germany's Thyssenkrupp on Wednesday said that they had struck a preliminary deal to create the continent's second largest steel producer after ArcelorMittal, in a bid to tackle crippling oversupply in the market. In Tata, we have found a partner with a very good strategic and cultural fit.
Shares in Tata Steel were up 0.7 per cent.
The European steel industry has been battling to cope with lower prices as a result of a flood of cheap imported steel, mainly from China, and the...
"As always, the devil will be in the detail and we are seeking further assurances on jobs, investment and future production across the United Kingdom operations". Under the agreement, both the companies will have 50% stake in the newly formed entity.
"As a priority, we will be pressing Tata to demonstrate their long term commitment to steelmaking in the United Kingdom by confirming they will invest in the reline of Port Talbot's blast furnace no.5", he said.
Thyssenkrupp will not be liable for any future funding demands of a new pension scheme sponsored by Tata Steel UK, its chief financial officer said.