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Tata Steel and Thyssenkrupp merger welcomed by unions | |
(about 3 hours later) | |
Unions have welcomed a merger between Tata Steel and Thyssenkrupp which will create Europe's second-biggest steelmaker. | |
The deal will mean Indian-owned Tata's UK plants are merged into a pan-European venture, which includes the UK's biggest steelworks at Port Talbot. | |
Tata said its "ambition" was to not have any compulsory redundancies in the UK as part of the joint venture. | Tata said its "ambition" was to not have any compulsory redundancies in the UK as part of the joint venture. |
The steelworkers' union said the deal may secure jobs and lead to investment. | |
Community general secretary Roy Rickhuss said it had "the potential to safeguard jobs and steel-making for a generation". | |
But he also warned the venture would only succeed if there was strategic investment to make sure the business thrived. | |
German-owned Thyssenkrupp's supervisory board gave the go-ahead to the merger on Friday - the two companies have been in negotiations for more than a year. | German-owned Thyssenkrupp's supervisory board gave the go-ahead to the merger on Friday - the two companies have been in negotiations for more than a year. |
Between them, they employ about 48,000 workers. | Between them, they employ about 48,000 workers. |
Fears of job losses | |
The merged group anticipates it will make costs savings of between £350m to £440m a year. | 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, half 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, half from administration and half from production. |
In Wales, almost 7,000 people are employed by Tata, including at Deeside and more than 4,000 in Port Talbot. | |
Tata had announced in 2016 that it wanted to sell off its entire UK operations - before scrapping plans and optioning for a merger deal. | |
While welcoming the deal, unions also wanted an end to uncertainty for workers. | |
Unite union national officer Tony Brady said workers had "made great sacrifices in working to secure a future for Tata Steel". | |
"We will be seeking guarantees over jobs and investment for the UK operations of the joint venture to secure the future of UK steel," he added. | |
Ross Murdoch, national officer of the GMB, echoed his comments. | |
'Important milestone' | '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 exports to their biggest market, the US. | More recently, European steel makers have faced 25% tariffs on exports to 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. |
Natarajan Chandrasekaran, chairman of Tata Steel, said: "This is a significant milestone for Tata Steel and we remain fully committed to the long-term interest of the joint venture company. | |
"We are confident that this company will create value for all stakeholders." | |
The venture will create the second biggest steel firm in Europe after Arcelor Mittal. | |
The new company, called Thyssenkrupp Tata Steel, would have annual sales of about £13bn and be based in the Netherlands. |