Tata Steel, Thyssen Krupp may scrap merger plans
The deal has been slow moving as Tata Steel tries to solve the problem of its own 15-billion-pound British steel pensions scheme
Tata Steel may be considering breaking off talks over a planned merger of its European business with German conglomerate Thyssen Krupp, a UK media report claimed on Sunday. The talks had been revealed by Tata Steel last year, as part of a major restructuring of its UK steel business. However, The Sunday Times claims the deal may be under threat due to German pension liabilities.
Tata Steel may be considering breaking off talks over a planned merger of its European business with German conglomerate Thyssen Krupp, a UK media report claimed on Sunday.
The merger talks had been revealed by the Indian steel giant last year as part of a major restructuring of its UK steel business. Such a deal with the German steel major could potentially lead to the formation of a European steel behemoth with blast furnaces in Wales, the Netherlands and Germany. The Sunday Times claims that the deal may be under threat due to German pension liabilities.
The deal has been slow moving as Tata Steel tries to solve the problem of its own 15- billion-pound British steel pension scheme.
Last month, its UK workers had voted in favour of a new pension deal to save their jobs. Nearly 10,000 workers voted in a ballot in favour of moving from a final salary pension to a less generous scheme in return for job safety and Tata’s promise of nearly 1-billion-pound worth of investment over the next 10 years. According to the newspaper, Dutch unions representing workers at Tata’s vast I Jmuiden plant has raised concerns over the Thyssen Krupp pensions, which is an unfunded liability, underpinned by cash-flow from the steelworks.
Thyssen Krupp is under pressure from the activist investor Cevian and recently sold its steel venture in Brazil for ^1.3 billion.