thyssenkrupp, Tata Steel Merges European Units

Mumbai, India – German steelmaker
thyssenkrupp  AG and Tata Steel Ltd are merging their European steel operations to create Europe’s steelmaker second only to ArcelorMittal. The cashless deal will have both groups contributing debt and liabilities to achieve an equal shareholding and will remain long-term investors.

The new company, a Netherlands-based entity called thyssenkrupp   Tata Steel, will generate annual pro forma sales of €15 billion, ship 21m tonne of flat steel products per year and employ about 48,000 people at
34 locations.

The 50:50 joint venture outlines an annual cost synergy of about €400-600 million through integration of sales and administration, research and development, optimization of procurement, logistics, service centers and other support activities.

Natarajan Chandrasekaran, Executive Chairman, Tata Sons Ltd, the group holding company, 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.”

According to him, it will put Tata Steel India in a strong position to accelerate expansion and “double its capacity through organic or
inorganic route”.

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