ThyssenKrupp and Tata to merge their steel business in Europe to deal with overcapacityAutomotive News
Create a European giant, behind ArcelorMittal
They anticipate the departure of 4,000 workers
have announced an agreement to merge their steel activities in Europe. This is an attempt to consolidate the new European business scenario, marked by falling prices, overcapacity in the market and cheap imports from China.
Thyssen Krupp and Tata Steel have agreed to create a joint venture in which 50% will participate, a group that will give rise to the second European steel group behind ArcelorMital.
The agreement will generate synergies of some 400 or 600 million euros per year but will also bring down employment: up to 4,000 workers will leave the company, about 8% of the workforce. Of these, it is planned to reduce up to 2,000 administrative jobs and, probably, up to 2,000 more in the production area, Efe reports.Thyssenkrupp Steel has nine plants in Europe, all in Germany and Belgium. Tata Steel has steel mills in the United Kingdom and the Netherlands, and manufacturing plants throughout Europe. In Spain it has the services center Layde, dedicated to the transformation of steel products, and Durango, Vizcaya.lion euros and a workforce of about 48,000 workers, currently in 34 locations. Production will be about 21 million tonnes per year.
The firm will need the approval of the board of directors of both companies, in addition to regulatory authorizations, including the approval of the European Commission.
According to a joint statement, the new company will be called Thyssnkrupp Tata Steel and will have its headquarters in Amsterdam. The new company will have pro forma sales of 15,000 mil
“With this joint venture planned, we want to give Thyssenkrupp and Tata a long-term future,” said Heinrich Hiesinger, CEO of Thyssenkrupp. “We address the structural challenges of the European steel industry by setting up a strong number two company.”
FIVE DAYS – SEPTEMBER 20 2017 – (Translation Soft)
Thyssenkrupp and Tata Steel