ThyssenKrupp and Tata to join forces in steel sector in Europe

The German heavy industry giant ThyssenKrupp and the Indian Tata Group have agreed to join their business activities in the steel sector in Europe, which will enable them to take second place in this sector, after ArcelorMittal.

The two groups, which will finalize the agreement in 2018, expect to gain around EUR 400 to 600 million a year from this synergy, which will probably close down 4,000 jobs in the production and the administration.

The reduction of the number of employees, which the unions in ThyssenKrupp and German officials have feared for a few months now, would be split roughly evenly between the two companies.

The joint company, to be called ThyssenKrupp Tata Steel, will be a holding company headquartered in the Netherlands with a joint management, employing around 48,000 people in 34 locations.

– The steel industry has faced massive challenges in Europe for many years – ThyssenKrupp explains and adds that “steel demand is characterized by a lack of dynamic and there is structural overcapacity in supply and constantly high import pressure”.

– Consequently, all producers are under pressure to fill capacity and forced to pass on restructuring gains to the market time and again. The result is a downward spiral and a need for restructuring about every three to four years, with major steel assets coming under threat of closure in the medium term – ThyssenKrupp says.

The new company is expected to realize sales of EUR 15 billion and production of around 21 million tons of steel a year. However, the statement of intent signed by the two groups now needs to be approved by relevant authorities, ThyssenKrupp says.

ThyssenKrupp AG Nemačka

Tata Motors India

ArcelorMittal Luxembourg

ThyssenKrupp

Tata India

production of steel

Arcelor

Mittal

ThyssenKrupp Tata Steel

steel mills