Tata Steel and ThyssenKrupp are discussing the possibility of an alliance

The German steel producer ThyssenKrupp has confirmed that it is in discussions with its Indian rival Tata Steel. All this after the Mumbai-based company postponed the planned sale of its U.K. business. Because it explores „more sustainable” alternatives.

In an announcement, Tata stated that it is determined to „explore the feasibility of a strategic collaboration through a potential joint venture”. The company said that it entered into discussions with other strategic players in the industry, although it named only ThyssenKrupp.

„A potential strategic combination for strip products offers the best prospects to create a premium business. World-class steel strips with the breadth of capabilities and scope that can successfully compete on the world stage,” Tata CEO Steel for Europe, Koushik Chatterjee.

The shares of the steel producer ThyssenKrupp

Its shares recently rose 5.5% to €19.10 ($21.08). ThyssekKrupp representatives: „The entire steel industry in Europe is currently fighting to protect the future of its business. Only a few steel producers in Europe are profitable in the current conditions, ThyssekKrupp is one of these few companies. We have repeatedly stressed that, in this situation, we consider it necessary to consolidate the European steel industry. I also emphasized that, in this situation, everyone in the industry is looking for partnerships. Among others, we are also in discussions with Tata Steel.”

In recent weeks, there have been reports, never publicly commented on by the company. That the steel market has improved enough for Tata Steel to consider maintaining operations in the U.K.. Possibly with an eye on collaborating with European partners. Rumors of negotiations with ThyssenKrupp have existed at least since last year, although they were not previously confirmed.

In a recent statement, Tata said it had thoroughly reviewed offers from seven potential buyers for its UK operations, including the Port Talbot plant. It analyzed each offer based on its commercial value, as well as the prospects for the future viability of the business in the UK.

But also taking into account the uncertainties caused by the June 23 Brexit vote to leave the European Union, as well as the ongoing consultation of the U.K. government. regarding the British Steel pension scheme.

Article source: https://www.thestreet.com/story/13634513/3/tata-thyssenkrupp-discuss-european-steel-alliance.html