Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Stock Report

| More

Tata Steel and thyssenkrupp sign Memorandum of Understanding to create a leading European steel enterprise in a 50:50 JV

Posted On: 2017-09-20 08:50:10

Tata Steel Limited and Thyssenkrupp AG have signed a Memorandum of Understanding (MOU) to create a leading European steel enterprise by combining the flat steel businesses of the two companies in Europe and the steel mill services of the Thyssenkrupp group. The proposed 50:50 joint venture - Thyssenkrupp Tata Steel - would be focused on quality and technology leadership, and on the supply of premium and differentiated products to customers, with annual shipments of about 21 million tonnes of flat steel products.

The joint venture would have a pro forma turnover of about Euro15 billion per annum (Rs115,000 crore) and currently employs about 48,000 people spread across various locations. It would be headquartered in Amsterdam, Netherlands. The proposed combination of businesses would be formed through a non-cash transaction framework, based on fair valuation, where both shareholders would contribute debt and liabilities to achieve an equal shareholding in the venture.

Thyssenkrupp Tata Steel would have a robust capital structure that is well matched by the underlying free cash flows of the company. It would benefit from the scale and distribution network capability of the combined assets to achieve quality, technology and cost leadership in the European steel industry. It is also the clear intent of both partners to remain as long-term investors and continue the present network configuration of all the upstream hubs in the proposed joint venture company.

Commenting on the MoU, N Chandrasekaran, Chairman, Tata Steel said, "The Tata group and Thyssenkrupp have a strong heritage in the global steel industry and share similar culture and values. This partnership is a momentous occasion for both partners, who will focus on building a strong European steel enterprise. The strategic logic of the proposed joint venture in Europe is based on very strong fundamentals and I am confident that Thyssenkrupp Tata Steel will have a great future."

"Thyssenkrupp and Tata Steel are creating a sustainable future for their respective European steel activities by jointly forming the planned joint venture. This business combination creates a strong number 2, and is thus much better positioned to cope with the structural challenges in the European steel industry. With Tata Steel, we have found a partner with a very good strategic and cultural fit. Beyond a clear performance orientation, we also share the same philosophy of corporate responsibility towards employees and society", said Dr Heinrich Hiesinger, chairman, executive board, Thyssenkrupp.

Mr Chandrasekaran added, "As our partnership with Thyssenkrupp progresses in Europe, Tata Steel is well positioned to leverage India's growing economy by adding significant capacity in value added products to meet emerging customer needs. Tata Sons would continue to financially support Tata Steel's strategy for capacity expansion through organic and inorganic growth opportunities in India."

Koushik Chatterjee, group executive director, Tata Steel, said "The signing of the MoU with Thyssenkrupp marks an important milestone for Tata Steel group with regard to wider European portfolio strategy. Based on our initial assessment, cost synergies in the range of Euro400 to Euro600 million per annum may be realised through integration of commercial functions, R&D and other supporting activities. Both shareholders have taken care to ensure that the balance sheet of the combined venture will be structured to ensure a sustainable business going forward. The proposed transaction in Europe also paves the way for significant de-leveraging of the Tata Steel group's consolidated balance sheet and provides the platform for Tata Steel to pursue future growth."

Through the combination, both companies would benefit from significant synergies. In the early years, these synergies would primarily derive from an integration of sales and administration, research and development, a joint optimisation of procurement, logistics and service centres. In addition to this, Thyssenkrupp Tata Steel would seek to improve capacity utilisation of the network across the three hubs of IJmuiden (the Netherlands), Duisburg (Germany) and Port Talbot (Wales, UK) and their related downstream facilities.

The process will now move to the next phase in the transaction with due diligence and negotiations on the definitive detailed agreements. The combination is subject to execution of the final agreements and obtaining all corporate authorisations, including Board and Tata Steel shareholder approvals. Completion would be conditional on certain closing conditions, including obtaining requisite competition approvals.

Shares of TATA STEEL LTD. was last trading in BSE at Rs.687.65 as compared to the previous close of Rs. 676.55. The total number of shares traded during the day was 649972 in over 8115 trades.

The stock hit an intraday high of Rs. 691.05 and intraday low of 674.3. The net turnover during the day was Rs. 445605878.

Source: Equity Bulls

Click here to send ur comments or to

Other Headlines:

Zensar to showcase Store of the Future at ShopTalk 2018
Mahindra Renewables achieves financial closure for 250 MW Solar Power Project in Rewa Madhya Pradesh with YES BANK
Cyient has been placed in the winner's circle of the HfS Aerospace Engineering Services Blueprint 2017
Sonata announces significant functionality addition to its enterprise mobility product Halosys™
Raffles Health Insurance, Singapore Selects Majesco's Health Core Platform
Zensar and Microsoft extend Strategic Partnership in South Africa
MMTC Ltd approves 1:2 bonus issue
Loyal Textile Mills Ltd announces resignation of CEO
Datamatics Global Services Ltd to consider interim dividend for FY 2017-18
Varun Beverages Ltd updates on change in Directors
RBI approves increase in RFPI limit of Future Retail Ltd to 49%
Sacheta Metals Ltd announces resignation of Mr. Kalyan C Shah
Arfin India Ltd bags Calcium and Ferro Boron Management at JSW Steel Plant, Dolvi
Fortis Healthcare Ltd announces resignation of Dr. Preetinder Singh Joshi
SBI takes possession of premises owned by PAE Ltd
Indian Oil Corporation Ltd announces cessation of Dr.B.Mahadevan as Director
Saven Technologies Ltd to consider allotment of fresh shares
Elpro International Ltd to sell stake in PNB Metlife
Prism Cement Ltd's JV completes expansion project
City Union Bank opens 7 new branches on Mar 19, 2018
KIOCL Ltd Board declares Interim Dividend of Rs. 0.27 for 2017-18
Zandu Realty Ltd announces resignation of company secretary
United Drilling Tools Ltd announces cessation of Director
Gujarat State Petronet Ltd to aquire 3,91,06,328 shares of Gujarat Gas Ltd
Elantas Beck India Ltd receives two licenses for MTO & Solvent Naphtha
Shalimar Paints Ltd to approve rights issue letter of offer
Sparkling India Finshares Ltd appoints company secretary
CARE assigns ratings to Nila Infrastructures Ltd
TCS Recognized as a Leader in Cloud Enablement Services by Everest Group
IFCI gets favorable verdict in sale of assets of Blue Coast Hotels Limited for recovery of dues
Newgen Software recognized as a 'Leader' in Dynamic Case Management, Digital Process Automation and ECM by top Independent Research Firm
BGR Energy Systems Ltd secures new order from TANTRANSCO
Granules India Limited receives approval from US FDA for ANDA
Seamec Ltd settles dispute with SEAHORSE and PMS, Egypt
Seamec Ltd gets favorable consideration from CESTAT
Premier Pipes Ltd adjourns board meeting
Capacite Infraprojects Ltd receives order of Rs. 256.58 crores
Sheela Foam Limited receives Silver Medal
Setback for Blue Coast hotels Ltd in Goa Hotel case
AXIS Bank to give 6% interest for SB accounts with balance of Rs. 10 crore and above
Yogya Enterprises Ltd appoints additional director
Ultratech Cement Ltd to provide funds to Binani Industries Ltd to come out of NCLT
R S Software India Ltd approves further investment in Paypermint Pvt Ltd
Dolphin Offshore Enterprises India Ltd announces appointment to committees
Vivimed Labs Ltd to consider preferential issue on Mar 22, 2018
Gala Global Products Ltd approves issue of bonus shares
Devhari Exports India Ltd approves shifting of registered office
CARE reviews ratings of Orient Cement Ltd
GHCL Limited to launch new bedding product brand Rekoop
Tata Power - launches IoT based Automated Meter Infrastructure enabled by Tata Communications

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018