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Thyssenkrupp aims for MoU with Tata Steel on steel merger

Reuters  |  FRANKFURT/DUESSELDORF 

FRANKFURT/DUESSELDORF (Reuters) - could reach an agreement in principle this month to merge its European business with that of Steel, the group said on Monday, adding talks were constructive and had entered the final stretch.

Shareholders last week put pressure on to clinch a deal after talks over a potential combination dragged on for a year and a half, mainly held up by negotiations over Steel's British pension liabilities.

That hurdle was removed after on Monday received regulatory clearance on a pension deal initially reached a month ago, enabling it to separate its UK pension scheme from the group.

A spokeswoman for said both groups were close to a memorandum of understanding (MoU), paving the way for a detailed look at one another's books and detailed negotiations before creating the second-largest steelmaker in Europe.

Chief Executive Heinrich Hiesinger favours a joint venture, saying this would be the best option to eliminate overcapacities in the volatile sector but drawing opposition from labour representatives, who fear cuts.

Trade union IG Metall said it remained opposed to a joint venture, adding there were no signs the labour representatives it has on Thyssenkrupp's supervisory board would agree.

Monthly Manager Magazin reported that Thyssenkrupp's supervisory board could agree to a combination either on Sept. 23 or 24, citing people involved in the negotiations.

A spokesman for Thyssenkrupp's works council confirmed that a board meeting initially scheduled for Sept. 12 had been pushed back to Sept. 23 or 24.

(Reporting by Georgina Prodhan and Tom Kaeckenhoff; Writing by Christoph Steitz; Editing by Maria Sheahan)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, September 11 2017. 19:08 IST
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