The Tata Steel plant at Port Talbot, South Wales.
The steel giant has signed an MoU which will see it merge its European operations with Thyssenkrupp AG.
Tata Steel and Thyssenkrupp AG have signed a Memorandum of Understanding (MOU) which could lead to the creation of one of Europe’s largest steel enterprises.
The proposed 50:50 joint venture – Thyssenkrupp Tata Steel – would see the company ship around 21 million tonnes of flat steel products each year and would employ 48,000 people across Europe, 8,000 of which are in the UK.
Natarajan Chandrasekaran, chairman of Tata Steel, said: “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.”
Dr Heinrich Hiesinger, chairman of the executive board at Thyssenkrupp, added: “Thyssenkrupp and Tata Steel are creating a sustainable future for their respective European steel activities by jointly forming the planned joint venture.
“This business combination creates a strong number two, and is thus much better positioned to cope with the structural challenges in the European steel industry.
“With Tata Steel, we have found a partner with a very good strategic and cultural fit. Beyond a clear performance orientation, we also share the same philosophy of corporate responsibility towards employees and society.”
The process will now move to the next phase in the transaction with due diligence and negotiations on the definitive detailed agreements.
The combination is subject to execution of the final agreements and obtaining all corporate authorisations, including board and Tata Steel shareholder approvals.
Completion would be conditional on certain closing conditions, including obtaining requisite competition approvals.
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