Tata Steel and Thyssenkrupp seal Steel Steel’s joint venture agreement



  Headquartered in the Netherlands, Thyssenkrupp-Tata Steel will be the second largest steelmaker in the continent after ArcelorMittal. Photo: Reuters "title =" Based in the Netherlands, Thyssenkrupp-Tata Steel will be the second largest steelmaker in the continent after ArcelorMittal. Photo: Reuters "clbad =" img-responsive "/> 

<p> Based in the Netherlands, Thyssenkrupp-Tata Steel will be the second largest steelmaker in the continent after ArcelorMittal Photo: Reuters </p>
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<p><b>  Frankfurt / Düsseldorf: </b> Germany Thyssenkrupp AG and India's Tata Steel Ltd signed a final agreement on Saturday to establish a steel joint venture, the biggest shock in the European steel industry in more than a decade, the final agreement comes after months of negotiations since an initial agreement was signed, announced in September, both companies hope it will help them respond to the challenges in the volatile steel industry, including overcapacity. </p>
<p>  The biggest deal in Europe's steel industry since the acquisition of Arcelor by Laxmi Niwas Mittal in 2006, the 50-50 Venture board, which will be called Thyssenkrupp Tata Steel, will have about 48,000 workers and about € 17,000 million is ($ 19,900 million) in sales. </p>
<p>  Based in the Netherlands, it will be the second continent. the largest steelmaker after ArcelorMittal. It is the core of Thyssenkrupp CEO Heinrich Hiesinger's plan to turn his steel conglomerate into submarines into a technology company. </p>
<p>  "The joint venture not only addresses the challenges of the European steel industry," said Hiesinger. "It is the only solution to create a significant additional value of around € 5 billion for Thyssenkrupp and Tata Steel due to joint synergies that can not be realized in an independent scenario." </p>
<p>  Tata Steel President Natarajan Chandrasekaran, in a separate statement, said the joint venture will create "a strong pan-European steel company that is structurally robust and competitive." </p>
<p>  The agreement occurs when European steelmakers face tariffs of 25% on their exports to the US. UU., Its biggest market. That could force the local market to absorb more volume as a result. </p>
<p>  Since the tariffs were announced at the end of May, shares of European steelmakers ArcelorMittal, Thyssenkrupp, Salzgitter and Voestalpine have lost 8% -17%. </p>
<p>  <b> New terms </b> </p>
<p>  Hiesinger had faced pressure from activist shareholders Cevian and Elliott to get more commitments from Tata Steel, whose European company has performed worse than Thyssenkrupp since it was announced. the agreement, creating a valuation gap. </p>
<p>  Thyssenkrupp said the joint venture agreement included "adequate compensation" for the breach, which it said was in the range of millions of euros in average digits: if the joint venture makes a widely expected initial public offering it would get a bigger part of the income. </p>
<p>  Thyssenkrupp said that it also ensured the right to decide when a quote could be made, adding that the joint venture had as its objective the payment of dividends in the million euros of low to medium digits. rank. </p>
<p>  The German group also said it now expects annual synergies of € 400 million to € 500 million from the transaction. He said that additional synergies were possible through the management of capital expenditure and the optimization of working capital. </p>
<p>  Tata Steel will remain responsible for environmental risks in Britain, where its Port Talbot factory is based, the least profitable of the joint venture, said Markus Grolms, vice president of the supervisory board of Thyssenkrupp. </p>
<p>  He also said that the Dutch unit of Tata Steel would be part of the joint venture's cash accumulation mechanism. That had been a key demand for German workers concerned that Tata would give better conditions to their workers in the new company. "Yes, we want to protect people, but we also want a company with better opportunities and fewer risks," said Grolms. </p>
<p>  The Thyssenkrupp administration will present a refined strategy to its supervisory board in the second week of July. People familiar with the agreement said they can include a sale of their Materials Services unit and higher cost cuts. </p>
<div clbad= First Publication: Sat, June 30, 2018. 03 10 PM IST

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