Europe's second-biggest steel firm forged from Thyssenkrupp and Tata merger
- Author: Wendy Palmer Sep 21, 2017,
Sep 21, 2017, 0:41
In terms of volume, 6.50 lakh shares of the company were traded on BSE and over 87 lakh shares changed hands at NSE during the day.
The combined company will have annual revenues of about €15bn (£13bn) and produce about 21m tonnes of steel a year, with 55pc of this coming from Thyssenkrupp and 45pc from Tata.
Thyssenkrupp, whose fiscal year ends September 30, has said there could still be a memorandum of understanding (MoU) with Tata Steel this month, which would pave the way for due diligence, a detailed look at each other's accounts. This business combination creates a strong number 2, 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".
The groups expect a complete deal by 2018.
The 50-50 joint venture, named "ThyssenKrupp Tata Steel", will be a holding company in the Netherlands with joint management and will employ some 48,000 people across 34 sites.
The 50-50 joint venture is expected to produce annual cost savings of up to 600 million euros (£533 million; $720 million) for the firms.
Shares in Tata Steel closed up 1.7 percent at 687.65 rupees, having earlier hit a high of 691.80 rupees.
Long-awaited news of a deal between Tata Steel Limited and thyssenkrupp AG has finally surfaced after months of speculation.
Roy Rickhuss, chair of the steel coordinating committee representing UK unions Unite, GMB and Community, said the unions recognised the industrial logic of the deal, but would still press Tata to confirm it will invest in the Port Talbot steelworks, a vital regional employer. "Not only do we share a clear performance orientation, but also the same understanding of entrepreneurial responsibility toward workforce and society", he added.
Senior executives from both companies are calling the new business thyssenkrupp Tata Steel (tkTS).
Tata made the commitments to safeguard jobs and invest in Britain's Port Talbot steelworks a year ago in return for the unions agreeing to close their final salary pension scheme to future accrual.
The deal will require the approval of Thyssenkrupp's supervisory board and Tata Steel's board of directors as well as that of the European Commission.