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Way forward for Steel

Way forward for Steel


Good progress – expected synergies confirmed

Way forward for Steel

On December 21, 2017 thyssenkrupp and its employee representatives had agreed to enter into a collective agreement which among other things safeguards jobs until September 2026. After IG Metall’s collective bargaining committee recommended accepting the agreement, members were invited to vote. thyssenkrupp welcomes the clear approval given by IG Metall members for the collective agreement on the joint venture in which thyssenkrupp and Tata Steel plan to combine their European steel operations.

Way forward for Steel

The settlement applies to all of thyssenkrupp’s German steel sites. The collective agreement is to come into force with the start of the joint venture and apply for around 8 years until September 30, 2026.

The main results:

Courage to change

Heinrich Hiesinger

In recent months we conducted intensive talks with Tata about a possible joint way forward. As a listed company we were unwilling and unable to comment in detail on speculation about this. On September 20 thyssenkrupp and Tata Steel signed a memorandum of understanding to combine their European steel operations in a 50/50 joint venture. That means we intend to establish a new company in which thyssenkrupp and Tata will hold equal interests. We will contribute thyssenkrupp Steel Europe with all its sites and employees to this joint venture. It is also planned to transfer thyssenkrupp MillServices & Systems to the joint venture. The name of the company will be thyssenkrupp Tata Steel.

On December 21 we have reached a negotiated settlement on the conclusion of a collective agreement with the employee representatives. The agreement will set collectively agreed parameters for the planned combination of the European steel activities of thyssenkrupp and Tata Steel Europe in a 50/50 joint venture.

The settlement applies to all of thyssenkrupp’s German steel sites.

The outcome achieved represents a key prerequisite for meeting our strategic objectives and at the same time satisfying the interests of our employees. The settlement therefore corresponds with our understanding of corporate responsibility. It gives us the ability to achieve the economic advantages and synergies forecast for the joint venture and so create value as planned for thyssenkrupp and its shareholders. At the same time we are providing the employees of the joint venture with good prospects for the future and securing jobs.

Dr. Heinrich Hiesinger

CEO, thyssenkrupp AG

Good reasons for the joint venture

Size:

We will be the clear number 2 for flat steel in Europe – and therefore much stronger. On the steel market in particular, size is an important success factor. That is why past mergers (e.g. Krupp with Hoesch, Thyssen with Krupp-Hoesch) have made us more successful.

Focus

We will focus on what we know best: steel. That will give us better opportunities to invest and grow. For example we are strong in the automotive sector, Tata Steel Europe with industrial customers.

Innovations:

Today thyssenkrupp and Tata are working separately on the same or similar innovations. By combining our expertise in the future we will be able to develop new products or better processes faster and more cost-efficiently.

Production:

In the future we will have a Europe-wide production network. That will enable us to manufacture our products close to our customers, which will make us more dependable, faster and less expensive.

Customers:

We are strong in Germany, and together in the future we will be strong throughout Europe. That will give us much broader access to customers and markets.

Sustainability:

As part of a powerful joint venture, thyssenkrupp’s steel operations will be much more sustainable in an environment characterized by highly volatile prices and constant restructuring at all European steel companies.

Message from the Board

Dr. Heinrich Hiesinger

“The outcome achieved represents a key prerequisite for meeting our strategic objectives and at the same time satisfying the interests of our employees. The settlement therefore corresponds with our understanding of corporate responsibility. It gives us the ability to achieve the economic advantages and synergies forecast for the joint venture and so create value as planned for thyssenkrupp and its shareholders. At the same time we are providing the employees of the joint venture with good prospects for the future and securing jobs.”

Dr. Heinrich Hiesinger
CEO, thyssenkrupp AG

Oliver Burkhard

“The members of IG Metall at the steel sites have decided with a clear majority in favor of the collective agreement and this will give the planned joint venture a strong future. This joint result does justice to the interests of the company and gives our employees security. That is in line with our corporate culture.”

Oliver Burkhard
CHRO, thyssenkrupp AG

Guido Kerkhoff

“When the Joint Venture comes into effect, the key balance sheet ratio will improve significantly.”

Guido Kerkhoff
CFO, thyssenkrupp AG

Videos

  • How will we secure a way forward for steel?
    See the answer in this following film.

  • "I believe in the way forward for steel"
    Have a look at what our employees say about the joint venture.

What happens next?

Due Diligence
On the basis of the memorandum of understanding we have conducted a due diligence in the last months. This is a process in which the negotiating partners thyssenkrupp and Tata gained access to confidential business documents, so far as this is allowed between competitors.

In addition internal and external experts exchanged information on specific topics. This process also involved mutual plant visits. In parallel with the due diligence, the first concrete contract negotiations took place with Tata. At the same time there were discussions in a working group with the employee representatives.The employee representatives agreed on a joint negotiation result on December 21, 2017. IG Metall announced on February 5, 2018 that its members at all German steel sites had voted in favor of this result. The collective agreement will be signed in the next step and come into force with the closing, i.e. at the start of the joint venture.

Signing
The joint contract will be signed after negotiations are completed.
Regulatory examination phase
The regulatory approval by the authorities begins. The authoritites must approve the establishment of the joint venture.
Closing
After regulatory approval the contract will be closed and the new company established.
Integration
The step-by-step integration of the two companies begins.

Questions & Answers

FAQ

You can find all information regarding the joint venture in our FAQs.

Please contact us!

Do you have more questions? We are happy to answer you.

More information

Employees

We want to engage in an open dialogue: Let us talk!

Employees of thyssenkrupp can find further information in our internal media.

Ask questions on “we.direct to”!

Log on to the intranet with your personal details.
If you have technical questions, please contact your local IT support.

Investors

Information for investors can be found here.

https://www.thyssenkrupp.com/en/investors/

Press

We have put together all our press releases for you here:

Still have questions? Contact us at: https://www.thyssenkrupp.com/en/newsroom/press-contacts/

Press release of April 12, 2018

Press release of December 21, 2017

Press release of September 20, 2017

Summary of the press conference (September 20, 2017) is available here.

Complete recording of the press conference (September 20, 2017) is available here.

More information at https://www.thyssenkrupp.com/en/newsroom/

Disclaimer

Statements in this press release describing the Company’s performance may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results may differ materially from those directly or indirectly expressed, inferred or implied. Important factors that could make a difference to the Company’s operations include, among others, economic conditions affecting demand/ supply and price conditions in the domestic and overseas markets in which the Company operates, changes in or due to the environment, Government regulations, laws, statutes, judicial pronouncements and/ or other incidental factors.

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