thyssenkrupp and Tata Steel have signed a memorandum of understanding (MoU) to combine their European steel activities in a 50/50 joint venture. Their aim is to create a leading European flat steel player to be positioned as quality and technology leader. The new entity is set to have pro-forma sales of about EUR 15B and shipments are envisioned to be about 21 MT a year.
To be named thyssenkrupp Tata Steel, the planned joint venture will be managed through a lean holding company based in the Netherlands. It is to have a two-tier management structure comprising a management board and a supervisory board. Both boards are to have equal representation from thyssenkrupp and Tata.
In the initial years – from closing onward – the joint venture partners plan to focus on establishing the joint venture and leveraging synergies. After the ramp-up phase, the joint venture partners expect annual synergies of EUR 400M to EUR 600M.