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Thyssenkrupp, Tata Steel delay signing of steel joint venture


By and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) - A joint venture between and will be delayed by ongoing talks between the Indian group and its British and Dutch workers, the German company said on Thursday.

Unlike Thyssenkrupp, has yet to reach labour agreements at its in Britain and IJmuiden in the Netherlands, a key condition for a deal aimed at cutting overcapacity in the sector.

The groups agreed in principle in September to combine their European activities to create the continent's second-largest steelmaker, behind

Boards at both companies are expected to decide on the 50:50 venture by the end of June, said, with the official signing now planned to take place afterwards. The groups had previously aimed to sign the deal in the beginning of 2018.

The German company did not say when the deal, which had been expected to close the end of 2018, would be concluded, indicating that it could now be delayed into 2019.

Tata Steel's proposed agreement with workers in the has drawn opposition from Thyssenkrupp's own powerful unions who fear that its German sites could be treated less favourable in the venture.

"We will not accept worse conditions for the German sites," said Detlef Wetzel, member of the works council of Europe, which is to be merged with Europe.

The deal marks a key step towards Thyssenkrupp's goal of becoming more focused on technology and industrial goods and cutting its reliance on the volatile sector, a shift welcomed by investors who are demanding further changes.

Following the joint venture's signing, Thyssenkrupp's management, led by Heinrich Hiesinger, will present a refined strategy to the group's supervisory board.

"With the planned joint venture achieves a key prerequisite for a sharpening of the group's strategic target and subsequently also the financial targets," it said.

That could involve selling Materials Services, Thyssenkrupp's largest division by sales, in which smaller rival has long shown an interest.

(Editing by Douglas Busvine/Edward Taylor/Alexander Smith)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 21:02 IST