Ad Here  
Ponni Sugars (Erode) Ltd: not so sweet 2012-13 L & T’s floating dock for navy A niche in FMCG business... IOB on turnaround path Sundram Fasteners rejigs international Singur minus Nano – victory or folly? Wabco launches safety system Dish TV – subscriber additions encouraging A welcome initiative-even critics are recognised ITC – steep excise hike Right to privacy – now it’s fundamental! Is this a generation gap? Tata Motors bets on new launches Record two-wheeler sales Last stages Tata Motors joins compact SUV bandwagon with Nexon Shriram Life clocks more than Rs.1000 crore premium in 2015-16 Carnival Films acquiring 3000 screens pan India L & T set bigger ambitions in defence business Eyes strong growth in 2016-17 TVS Srichakra plans capacity expansion AL introduces Guru & Partner Aurobindo Pharmacy: good turnaround L&T profit up by 11 per cent V-Guard launches app-enabled water heater system CAPITAL NOTES Ode to Ratan Tata PSU non-life firms seek to protect share Toyota and Suzuki to introduce EVs in India by 2020 Solar installations exceed 2015 capacity in five months TN government keen on revival of operations at Nokia complex He excels in the nuts and bolts of entrepreneurship It takes two to tango Are they really independent? From the toughest to the best year Smooth sailing of SAIL Maruti – for young buyers When small is not so beautiful… Sivasankaran enters taxi space to take on Uber and Ola RoC in the dock... ITC chairman calls for policy impetus to transform agriculture Chinese smart phones flourish in small towns too! Tata Steel, ThyssenKrupp sign MoU to merge European units E.I.D Parry (India) Ltd: another sweet year Increasing market share Vellayan is back, after 150 days Kone India eyes further growth in elevator market 29 per cent jump in TCS revenues New India Assurance posts impressive show Emami – a new growth mantra Gamesa to set up a plant in Nellore AL secures orders for 3600 buses Mercedes-Benz sales continue to zoom TVS Automobile invests Rs.75 crore in start-up firms Michelin to double Chennai capacity The unexpected exit Bajaj Finserv – Q1: fare well LVB posts 31 per cent growth in Q1 net profit Daimler’s truck exports from Chennai cross 5000 units The gainers and the losers Hindalco – re-rating M & M unveils driverless technology for tractors HPCL plans Rs.61,000 crore capex over 5-years Hyundai to focus on SUVs and AMT variants L&T bags the Mumbai Trans-harbour link order Housing demand revival Tata Motors charts investments in PV and CV businesses Hyundai India achieves 7 mn production at Chennai factory Tata Motors aims to be among the Top 3 global CV & PV firm Consolidating leadership position in smartphones PPP model for infrastructure development Rane targets Rs.5500 crore topline by 2018-19 Preparing for the next growth curve Tata gets 4-star rating for Zest Back in growth mode Smartphone onslaught by Chinese brands Land wars AL wins Deming prize again Nissan exit shouldn’t affect ALL Titan Company – sales recovery to kick in TI Cycles plans retail expansion to drive sales for premium bicycles Forging industry worried over lower supply of steel and its price Daimler grows sales and share in India Welcome focus to improve rural India... Yamaha unveils scooter boutique
Tata Steel, ThyssenKrupp sign MoU to merge European units

The massive expansion of steel capacity by China and its aggressive marketing, often offering at low prices, had severely impacted steel producers in developed countries in Europe, Japan and elsewhere. Tata Steel Ltd (TSL) that acquired the European giant Corus Steel, much larger than its Indian operations, was among the severely hit. TSL has been vigorously looking out for solutions to get out of their European operations that were pulling down the operations of the Tatas in India.

There was the added problem of tackling the huge burden of employee costs. Last year the company sold off its long products facility at Scunthorpe in northern England for just 1 pound to investment firm Greybull Capital LLP. Still, the other mills with annual losses of around a million euro could not be sold.

In this background the recent news on a partnership with the German steel giant ThyssenKrupp in a 50:50 joint venture is welcome news. Tata Steel and ThyssenKrupp have signed a MoU to combine their European steel operations in an equal joint venture to be named - ThyssenKrupp Tata Steel (TKTS). 

The non-cash transaction framework will combine the flat steel business of the two companies in Europe and the steel mill services of the ThyssenKrupp group. 

The deal will create the second largest player in Europe with annual shipments upwards of 21 million tonnes and total revenue and EBITDA of €15 billion (Rs.115,000 crore), and €1.5 billion respectively. The new entity is expected to have a workforce of 48,000 spread over 34 locations.

TKTS is expected to emerge a major flats producer with TSL adding all its flat steel business in Europe and ThyssenKrupp (TK) contributing its Steel Europe division. 

TKTS would be based out of the Netherlands and comprise a 2 tier structure with a management board and supervisory board. Both boards will have equal representation from Tata Steel and ThyssenKrupp.

“We see the agreement between Tata Steel and ThyssenKrupp to combine their European steel operations as mutually rewarding as not only will it aid consolidation in the European steel sector, but could likely pare debt from both partners’ balance sheets,’’ pointed out a report by Edelweiss Securities. 

Author :
Reported On :
Sector :
Shoulder :
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
S-15, Industrial Estate,
Chennai - 600 032.
PHONE: +91 44 22501236