ThyssenKrupp and Tata Steel UK may ink MoU on merger this month - Report
Reuters reported that ThyssenKrupp said that it could reach an agreement in principle this month to merge its European steel business with that of Tata Steel, as the talks were constructive and had entered the final stretch. A spokeswoman for ThyssenKrupp said the companies were close to a MoU, paving the way for a detailed look at one another’s books and detailed negotiations before creating the second-largest steelmaker in Europe.
The spokeswoman said “The management board is currently in talks over strategic options. A meeting of the supervisory board initially scheduled for September 12 had been moved back to ensure it was adequately informed.”
A spokesman for ThyssenKrupp’s works council said the meeting was scheduled to take place on Sept. 23 or 24.
ThyssenKrupp CEO Mr Heinrich Hiesinger is under pressure to deliver the planned combination, particularly following Tata Steel’s deal to cut its pension liabilities, after talks have dragged on for a year and a half. Mr Hiesinger favors a steel joint venture, saying this is the best option to eliminate overcapacities in the volatile steel sector but drawing opposition from labor representatives, who fear thousands of job cuts.
Trade unions remain opposed to Mr Hiesinger’s plan, preferring a carve-out that would see ThyssenKrupp list its healthy assets including its elevator unit on the stock market instead, in a fashion similar to utility RWE. Mr Dieter Lieske, head of the Duisburg-Dinslaken unit of IG Metall, Germany’s largest trade union, said “We reject a merger with Tata. There were no signs that labour representatives on the group’s supervisory board would agree to the merger plan.
Mr Lieske said Mr Ulrich Lehner, ThyssenKrupp’s supervisory board chairman, may be forced to use his casting vote if the 20-member board, with equal representation of labor and capital interests, reaches a stalemate over the decision.
Source : Reuters