- Memorandum of understanding signed to combine European steel activities in 50/50 joint venture
- Positioning as strong quality and technology leader
- Annual synergies of €400 million to €600 million expected
- Signing of agreement targeted for early 2018 and closing by 2018 year-end
Thyssenkrupp and Tata Steel have signed a memorandum of understanding to combine their European steel activities in a 50/50 joint venture. Their aim is to create a leading European flat steel player to be positioned as quality and technology leader. The new entity is set to have pro-forma sales of about €15 billion and a workforce of about 48,000, currently at 34 locations. Shipments are envisioned to be about 21 million tons a year.
Dr. Heinrich Hiesinger, CEO of Thyssenkrupp AG: “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. In Tata, we have found a partner with a very good strategic and cultural fit. Not only do we share a clear performance orientation, but also the same understanding of entrepreneurial responsibility toward workforce and society.”
Natarajan Chandrasekaran, Chairman of Tata Steel: “The Tata Group and Thyssenkrupp have a strong heritage in the global steel industry and share similar culture and values. This partnership is a momentous occasion for both partners, who will focus on building a strong European steel enterprise. The strategic logic of the proposed joint venture in Europe is based on very strong fundamentals and I am confident that Thyssenkrupp Tata Steel will have a great future.”
To be named Thyssenkrupp Tata Steel, the planned joint venture will be managed through a lean holding company based in the Netherlands. It is to have a two-tier management structure comprising a management board and a supervisory board. Both boards are to have equal representation from Thyssenkrupp and Tata. The codetermination structures in Germany, the Netherlands and Great Britain will be retained.
Thyssenkrupp intends to contribute its Steel Europe business to the planned joint venture. There are also plans for the joint venture to include Thyssenkrupp MillServices & Systems GmbH, a steel mill services provider that is part of the Materials Services business. Tata would add all of their flat steel activities in Europe.
The memorandum of understanding signed today paves the way for Thyssenkrupp to involve employee representatives at Thyssenkrupp AG and in the Steel business in the process ahead on an ongoing basis. All employee participation rights will continue to be respected as before.
In the months ahead, due diligence will be conducted. In the process, the negotiating parties will give each other access to confidential business documents to the extent permissible between competitors. Based on this as well as on discussions with the entire Supervisory Board, it is envisaged to sign a contract in early 2018. Closing – the effective start of the joint venture – could take place in late 2018 following antitrust approval by the relevant authorities.
- Regular Land Releases Feed Future Exploration Success in Queensland
- Continental acquired South African Tech Company to further develop its Services for the Conveyor Industry
- Locomotives at Gazprom's Obskaya-Bovanenkovo Railroad to be fueled with LNG
- Atlas Copco collaborates with Saab and Combitech to develop safe Mining Digitalization Solutions
- Huesker Group established Australian Subsidiary