Germany's Thyssenkrupp set to sign MOU with Tata Steel, set to create second largest steel company in Europe
File photo. Photograph: (Reuters)
Germany's steel company Thyssenkrupp said today it could reach an agreement in principle to merge its European steel business with Tata Steel.
The deal which was in the works for over one and half years was stuck mainly because of Tata Steel's pension liabilities in Britain. Tata Steel was able to ink an agreement last month agreeing on a final salary settlement with British Steel Pension Scheme.
In fact, last month Thyssenkrupp CFO Guido Kerkhoff had said his company would evaluate the Tata Steel and not rush into a deal with the Indian steel company.
However, on Monday a spokeswoman for Thyssenkrupp said both groups were close to a memorandum of understanding (MoU), paving the way for a detailed look at one another's books and detailed negotiations before creating the second largest steelmaker in Europe, Reuters reported.
Thyssenkrupp Chief Executive Heinrich Hiesinger favours a steel joint venture, Reuters said.
However, Trade union IG Metall said it remained opposed to a joint venture, adding there were no signs the labour representatives it has on Thyssenkrupp's supervisory board would agree, a Reuters report said.
India-based Lakshmi Mittal's ArcelorMittal is Europe's biggest steel-maker with headquarters in Luxembourg.