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Steel firm Thyssenkrupp backs Tata merger | |
(about 2 hours later) | |
German industrial group Thyssenkrupp has approved plans to merge its steel-making business with Tata Steel. | |
The merger would create Europe's second largest steel-maker - after Arcelor Mittal - but the firms have previously warned 4,000 jobs could be lost. | |
The firms employ about 48,000 workers, with India's Tata owning UK plants including Port Talbot in south Wales. | |
Unions have been asking for safeguards to protect the future of Port Talbot, which employs 4,000 people. | |
Thyssenkrupp's supervisory board gave the go-ahead to the joint venture on Friday - the two companies have been in negotiations for a year. | |
The new firm will have annual sales of about £13bn and the merged group anticipates it will make costs savings of between £350m to £440m a year. | |
When details of an initial agreement emerged last September both sides said they expected about 4,000 jobs would go as a result of the merger, with half coming from administration and half from production. | When details of an initial agreement emerged last September both sides said they expected about 4,000 jobs would go as a result of the merger, with half coming from administration and half from production. |
The job losses will be shared evenly between the two companies. | The job losses will be shared evenly between the two companies. |
In Wales unions hope the deal will bring an end to uncertainty for workers. | In Wales unions hope the deal will bring an end to uncertainty for workers. |
'Important milestone' | |
Thyssenkrupp chief executive Heinrich Hiesinger has previously said the two companies needed to consolidate and become more efficient because of increasing pressure from imports and an overcapacity within the industry. | Thyssenkrupp chief executive Heinrich Hiesinger has previously said the two companies needed to consolidate and become more efficient because of increasing pressure from imports and an overcapacity within the industry. |
More recently European steel makers have faced 25% tariffs on their exports to the their biggest market, the US. | More recently European steel makers have faced 25% tariffs on their exports to the their biggest market, the US. |
"The joint venture with Tata Steel is an important milestone for the transformation of Thyssenkrupp to an industrials and service group and will lead to a significant improvement of the financial figures of Thyssenkrupp," the group said in a statement. | "The joint venture with Tata Steel is an important milestone for the transformation of Thyssenkrupp to an industrials and service group and will lead to a significant improvement of the financial figures of Thyssenkrupp," the group said in a statement. |
It added that the "signing of the definitive agreement is expected shortly" and that the deal would be subject to clearance in several jurisdictions, including the European Union. | It added that the "signing of the definitive agreement is expected shortly" and that the deal would be subject to clearance in several jurisdictions, including the European Union. |
The new company will be called Thyssenkrupp Tata Steel and be based in the Netherlands. | The new company will be called Thyssenkrupp Tata Steel and be based in the Netherlands. |