NEW DELHI, Sept 20: Tata Steel today said it has signed an agreement with German steel giant Thyssenkrup to merge their steel operations in Europe in a 50:50 joint venture company.
“Tata Steel Ltd and Thyssenkrup AG have signed an MoU to create a leading European enterprise by combining the flat steel businesses of the two companies in Europe and the steel mill services of Thyssenkrupp group,” the domestic steel giant said in a statement.
The proposed 50:50 JV — Thyssenkrupp Tata Steel — would be headquartered in Amsterdam region of the Netherlands and will supply premium and differentiated products to customers, with annual shipments of about 21 million tonnes of flat steel products, the statement said.
The merger would be through a non-cash transaction framework based on fair valuation where both shareholders would contribute debt and liabilities to achieve an equal shareholder in the venture.
The two companies expect annual synergies of 400-600 million euros, it said.
“The JV would have a pro forma turnover of about 15 billion euros per annum (Rs 115,000 crore),” Tata Steel said.
“As partnership with thyssenkrup progresses in Europe, Tata Steel is well positioned to leverage India’s growing economy by adding significant capacity in value added products to meet emerging customer needs,” N Chandrasekaran, Chairman Tata Steel, said.
“thyssenkrup and Tata Steel are creating a sustainable future for their respective European steel activities by jointly forming the planned JV. With Tata Steel we have found a partner with a very good strategic and cultural fit,” Heinrich Hiesinger, Chairman, Executive Board, thyssenkrup said.
The two groups were in talks for a merger of their European steel businesses for almost over a year.
Shares of Tata Steel were trading higher by 0.74 per cent at 681.55 on BSE. (PTI)
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