Company News, 2018-04-12, 02:20 PM
Executive Board informs Supervisory Board about the status of the planned joint venture
- Good progress – expected synergies confirmed
- Due diligence almost completed – viable solutions for key issues achieved
- Consultation process with employee representatives at Tata Steel Europe currently underway
- Board decisions possible within first half of this year – signing planned afterwards
Today, the Executive Board of thyssenkrupp AG informed the Supervisory Board about the status of negotiations with Tata Steel regarding the planned joint venture of the European steel activities: The due diligence of both businesses is almost completed. Together viable solutions for key issues have been achieved.
As part of the due diligence, experts appointed by both sides have confirmed the strategic and operational potential of the joint venture and synergies of € 400 million to € 600 million. This includes the planned reduction of a total of up to 4000 jobs in the administration and production areas evenly shared by both partners over the next years. At the end of December 2017, thyssenkrupp reached a collective agreement that members of IG Metall approved in early February 2018.
As part of the required consultation processes, Tata Steel is currently working to finalize similar arrangements in relevant geographies including co-determination requirements as per national law. Tata Steel Europe is negotiating, among others, in the Netherlands and the United Kingdom. thyssenkrupp and Tata Steel agree that entities across all sites and businesses will be integrated and managed as one company in the joint venture.
Against this background we expect that the Boards will decide on the joint venture within the first half of this year. The requested independent opinions of experts will be made available to the Supervisory Board beforehand.
With the planned joint venture thyssenkrupp achieves a key prerequisite for a sharpening of the Group's strategic target and subsequently also the financial targets. The Executive Board will present the further refinement of its strategy to the Supervisory Board after the signing.
In September 2017, thyssenkrupp had announced the formation of a joint venture of its European steel activities with Tata Steel Europe. The aim of the joint venture is to create a leading European flat steel provider and position it as quality and technology leader. The new company is set to have sales of approximately € 15 billion and employ about 48,000 people.
Company blog: https://engineered.thyssenkrupp.com