Tata Steel is in talks with the German industrial conglomerate Thyssenkrupp AG, for a possible joint venture in Europe.
Tata Steel, world’s tenth largest steel major with capacity in excess of 26 million tonnes per annum (mtpa), had said last month that it was discussing with different companies after it planned to sell its assets in the U.K.
The planned sale, which put 15,000 jobs at risk, included the Port Talbot steel plant in Wales to pare losses that had been mounting because of a crash in steel prices and competition from cheap imports.
Consolidation move“It’s a combination of steel business. How can you combine your businesses and they don’t bring anything on the table,” Koushik Chatterjee, Tata Steel Group executive director (finance & corporate) said.
“We are having a conversation on a strategic consolidation in the European steel industry. Part of the conversation is that we look at assets and business on both sides and see how it works.” However, it is yet to be ascertained the size of the combined entity and the stake that Tata Steel and Thyssenkrupp AG will have in the joint venture. Thyssenkrupp AG on Thursday, after its results, said it is in discussions with Tata Steel Ltd for a potential joint venture in Europe.
Thyssenkrupp India spokesperson K Raghunath said: “Thyssenkrupp is extremely interested in consolidation. We are talking to several players including Tata Steel.”
On the possible contours of the joint venture, Chatterjee said: “When we come to the level of definitiveness, we will be able to discuss about it.”
Tata Steel is the second largest steelmaker in Europe with capacity of 18 mtpa after it acquired Corus while Thyssenkrupp AG Steel’s European operations has sales of 8.6 billion Euros and employs 27,600 people.
Investor concernsOn concerns expressed by investors about European steel operations during the Tata Steel AGM, Tata Group chairman Cyrus Mistry assured the shareholders that the company was looking at restructuring and was in talks with the U.K. government. An appropriate structure will be put in place with respect to the European steel operations, in the interest of all the stakeholders, he said.