Tata mulling majority stake in Thyssenkrupp venture

TATA Steel is said to be considering taking a majority stake in its venture with Germany’s Thyssenkrupp, in a move that would provide further proof of its commitment to the European steel sector.

According to Reuters, Tata may be open to taking a larger portion of the business than the 50pc stake it will receive under the joint venture, once the entity is publicly listed.

This will depend on how well its operations are doing in India and market conditions at the time of the float, Reuters said.

The deal with Thyssenkrupp, to merge European assets and create a £13.3bn-a-year giant, was first announced last September, and was seen as a defensive move by both Tata and the German firm in the face of fierce competition from Chinese steelmakers.

However, it had been expected that the new company, to be called Thyssenkrupp Tata Steel, would eventually be separated off from the two parent businesses, either through a sale or a flotation.

Tata was thought to be using the mega-merger in an effort to draw a line under its foray into the European steel sector, which has caused it to incur huge losses and writedowns, while Thyssenkrupp was understood to be looking to focus more on its profitable capital goods operations.

However, sources told Reuters yesterday that “Thyssenkrupp is looking to exit the steel sector while Tata is looking to stay and grow”.