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Germany’s ThyssenKrupp and India’s Tata merge to become Europe’s second-biggest steelmaker

German industrial giant ThyssenKrupp said on Friday it had finally agreed to the merger of its steelmaking business with India's Tata, making the merged firm Europe's second-biggest steelmaker.

Published: 30 June 2018 14:20 CEST
Germany's ThyssenKrupp and India's Tata merge to become Europe's second-biggest steelmaker
Photo: DPA
Conceived to take on the flood of cheap Chinese steel unbalancing world markets, the merged firm known as “Thyssenkrupp Tata Steel” will be based in the Netherlands. It will be second only to ArcelorMittal in the European steel 
industry.
 
Thyssenkrupp's executive and supervisory boards agreed to “create a 50/50 joint venture, which will combine the European steel businesses of Thyssenkrupp and Tata Steel”, the Essen-based group said in a statement.
 
Final signatures would follow “shortly”, it added, while competition authorities in the European Union and other jurisdictions must still give the go-ahead.
 
Bosses hope the tie-up, which took more than two years to negotiate, will create between €400 and €500 million ($468-585 million) per year in savings.
 
The merged firm will boast 48,000 employees spread around 34 sites, producing around 21 million tonnes of steel per year for revenues of around €15 billion.
 
ThyssenKrupp and Tata previously warned that the merger would mean around 4,000 jobs will be slashed in both production and administration, split evenly between the two firms.
 
Last December, ThyssenKrupp offered guarantees against layoffs and site closures to powerful German trade union IG Metall.
 
Workers had demonstrated several times against the plans by the group, whose products range from elevators to submarines as well as steel.

STEEL

German steel giant rejects ‘high cost’ state support

German industrial giant Thyssenkrupp on Friday rejected state participation to support it during the pandemic, an option favoured by unions but judged too costly by management.

Published: 12 December 2020 11:26 CET
German steel giant rejects 'high cost' state support
Thyssenkrupp's offices in Duisberg. Photo: Ina Fassbender / dpa / AFP
“State participation off the table,” Klaus Keysberg, the group's financial director, told the German daily Rheinische Post on Friday.
   
Keysberg blamed “high costs” in the long term of government assistance, “due to the interest payments and the terms of repayment.”
   
Already weakened by years of cut-price competition from China in the steel industry, Thyssenkrupp has further struggled with the effects of the pandemic that caused business activity to plunge.
   
The company said in mid-November it would cut an additional 5,000 jobs as part of its restructuring plan, bringing the total to nearly 11,000, to be spread out over several years.
 
   
Thyssenkrupp chief executive Martina Merz has not ruled out state assistance.
   
The powerful IG Metall union had organised rallies in October to demand a rescue plan from Berlin.
   
But the government was never enthusiastic, despite their acquisition of stakes in the airline Lufthansa and tour operator TUI, which also had business ravaged by Covid-19.
   
“I don't believe that nationalisation is the right response at the moment,” Germany's Economy Minister Peter Altmaier said in October on Thyssenkrupp.   
 
But national and regional governments favour more traditional aid structures, such as subsidies, or moves to convert to production of so-called green steel.
   
Discussions will continue to find alternatives.
   
A takeover of Thyssenkrupp's steel activities is still on the cards. British steel giant Liberty, founded by industrialist Sanjeev Gupta, launched a takeover bid in October.
   
Discussions are also underway with Sweden's SSAB and India's Tata Steel.
   
An alliance with fellow German steelmaker Salzgitter to create a national steel champion is also being considered. But these options won't be decided until “spring 2021”, Thyssenkrupp said.
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