The German industrial group Thyssenkrupp and Indian Tata Steel have taken the first steps towards merging their European steel production operations, foreign media report.
>>>ThyssenKrupp’s revenue €10.1 billion, adjusted profit jumped 40 percent
The agreement would create the second largest steel group in Europe, after ArcelorMittal. The two companies began negotiations last year after Tata abandoned plans to sell its business in the United Kingdom.
The companies have signed a memorandum of understanding that envisions a joint investment in equal 50 percent amounts, which would lead to annual savings of up to €600 million.
Thyssenkrupp CEO Heinrich Hiesinger stated that the companies must consolidate and become more efficient due to increasing pressure from exports and overcapacity in the industry. “In the joint venture, we will not apply and insist on measures that we would not have to accept ourselves,” he said.
The head of the British national union of steelworkers Roy Rickhuss said that unions welcome this news with caution and recognize the industrial logic of such a partnership.
