After the memorandum signed last year, the Indian Tata Acciai and the German ThyssenKrupp signed the definitive agreement which creates the new company, a 50/XNUMX joint venture to be called 'Thyssenkrupp Tata Steel', which will bring together their respective European activities in the steel sector and will become the second group in Europe after the Luxembourg-based ArcelorMIttal. The agreement, explains the communication, will create "a European steel champion".
The agreement assigns exclusively to ThyssenKrupp the possibility of deciding on the timing for a possible IPO of the new joint venture. Compared to the moment of the signing of the 2017 memorandum "the different development of the performances of Thyssenkrupp Steel Europe and Tata Steel Europe has led to a difference in valuation between the two entities", the definitive agreement therefore provides for "adequate compensation of this gap" : in the event of an IPO “Thyssenkrupp will receive a larger share of the proceeds, reflecting an economic ratio of 55/45” in its favor.
The operation "creates value" for both parties, underline the two companies, which synergies of 400-500 million euro are expected and a good optimization of the working capital. The price to pay in terms of employment will be "a rationalization of the workforce in the years to come up to 4.000 jobs". Furthermore, “the complete production network will be reviewed from 2020 with the aim of integrating and optimizing the production strategy for the entire joint venture”. The joint venture will be managed as a single integrated business through a holding company based in the Amsterdam region of the Netherlands.
