The hottest new second largest steel enterprise in

2022-08-12
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Will the new second largest steel enterprise in Europe be born

on September 20, ThyssenKrupp Group and Tata Steel Group jointly announced that the two companies would invest 50% each to merge their European businesses and form a steel enterprise called ThyssenKrupp Tata Steel. After the establishment of the company, it may become the second largest steel enterprise in Europe after ArcelorMittal. As early as September 20 last year, ThyssenKrupp Group and Tata Steel Group jointly announced that the two companies would invest 50% each to merge their European businesses and form a steel enterprise called ThyssenKrupp Tata Steel. After the establishment of the company, it may become the second largest steel enterprise in Europe after ArcelorMittal. As early as last year, Tata Steel had already approached and negotiated with ThyssenKrupp on the merger issue. So far, this negotiation, which took more than a year, has finally come to an end. The two sides are expected to sign a contract at the beginning of 2018 and officially launch the joint venture through the antitrust approval of relevant departments by the end of 2018

many obstacles caused the signing of the merger agreement to be late

in fact, the negotiation has been bumpy since the news of the merger between the two came out

as early as early July 2016, Tata Steel Group officially announced that it had entered into joint venture negotiations with ThyssenKrupp Group and planned to merge its European steel business with ThyssenKrupp's European steel business unit to optimize production capacity and reduce internal competition in the European market. After the announcement of Tata Steel, the spokesman of ThyssenKrupp also confirmed that it was conducting joint venture negotiations with Tata Steel

however, the negotiations between the two sides have been pending, and the biggest obstacle is the delay in solving the pension problem of Tata Steel UK. This is seen as the crux of Tata Steel's merger with ThyssenKrupp in Europe. Tata iron and steel UK company is facing heavy maintenance. In the future, building materials and plastics will be more and more favored by consumers. The old gold burden must be reduced to cope with the crisis. ThyssenKrupp has also repeatedly said that it will continue to consider the merger only if Tata Steel solves the pension problem. Until August 11 this year, Tata Steel signed a regulatory arrangement agreement on the UK company pension plan, separating the pension plan from the UK company pension plan (BSPs) and transferring it to the UK Pension Protection Fund (PPF), and providing £ 550 million and 33% equity to BSPs as compensation. At this point, this obstacle was cleared

in addition, the government and trade unions are worried about the possible layoffs and employment problems caused by the merger of the two. Tata Steel Europe Co., Ltd. is the second largest steel enterprise in Europe. Its three major steel enterprises are emereden steel plant (Netherlands), Port Talbot steel plant (UK) and skensop steel plant (UK). At first, ThyssenKrupp only wanted to acquire the profitable emereden steel plant, so as to cooperate with its Duisburg steel plant in production and sales, and promote its own automotive panel technology research and development and market development. However, Tata Steel tried to include its Port Talbot steel plant into the scope of the merger, which means that capacity compression and layoffs will be carried out after the merger. The German government is unwilling to hold foreign shares in domestic steel enterprises, and is unwilling to face the problem of large-scale layoffs, which makes the merger of the two sides encounter government obstacles

synergy may appear in many fields

despite the difficulties in the merger process, the merger of the two sides may be a win-win move under the background of the current difficult economic situation in Europe. After the merger, the two sides can optimize production capacity, reduce internal competition in the European market and better respond to the crisis

"The cooperation between the two sides is conducive to the role of economies of scale. By merging the second and third largest steel enterprises in Europe into the new second largest steel enterprise, the two sides will respond more effectively to market competition. In addition, the businesses of the two sides are complementary. ThyssenKrupp's equipment department is stronger, while Tata Steel's advantage lies in industrial customers. In addition, the main business locations of Duisburg, emerald and Port Talbot have good logistics connections Well, it will be able to serve a wider range of European customers. " ThyssenKrupp said in its official announcement

heinrichhiesinger, CEO of ThyssenKrupp, said: "Through the establishment of a joint venture, ThyssenKrupp and Tata Steel's European business will achieve more sustainable development. Tata Steel is a partner with a good development strategy and a high degree of compatibility with our culture. We not only have a common and clear business development direction, but also have the same understanding of the employees and society undertaken by the enterprise."

relevant information shows that in terms of management and business structure, the established joint venture will be managed by lean holdings in the Netherlands, including a two-tier management structure of the management committee and the board of supervisors. ThyssenKrupp will join its European steel business in the joint venture, and plans to include millservices systemsggmbh, which was established in 2008, while Tata Steel will merge all its European businesses into the new company. It is estimated that the annual sales of the joint venture will reach 15billion euros, the annual steel production will reach 21million tons, and the number of employees will reach 48000

in terms of operation and coordination, the two sides plan to focus on establishing joint ventures and giving play to synergies in the first few years. The areas of integration and collaboration mainly include sales, management, R & D systems, procurement, logistics and service centers, as well as downstream processing businesses. From 2020, the joint venture will begin to review the production network to integrate and optimize the production strategy of the whole joint venture

for Tata Steel and ThyssenKrupp, the European automotive market is their market with high profitability. The merger of their European businesses will not only help to cooperate in the production technology of automotive panels, but also enhance the pricing power in the European automotive panel Market and expand the sales market

for this merger, natarajanchandrasekaran, CEO of Tata Group, said: "with the progress of our cooperation with ThyssenKrupp in Europe, Tata Steel will be able to fully rely on India's growing economic strength to provide value-added products to meet the needs of emerging customers. Tata Group will continue to provide strategic support for Tata Steel's capacity expansion."

koushikchatterjee, executive director of Tata Steel Group, added that the signing of the preliminary agreement was an important milestone for Tata Steel to implement a broader European investment strategy. He said that according to the preliminary assessment, the two sides will save 400million euros to 600million euros a year through cooperation in business, research and development

all parties have different reactions to the merger of the two

over the years, the European steel industry has faced great challenges: lack of vitality in steel demand, structural surplus in supply, and increasing import pressure. All steel producers are facing the pressure of overcapacity and have to make profits through restructuring again and again, probably every three to four years. The merger of ThyssenKrupp and Tata Steel was welcomed and supported by most interested parties

after the signing of the preliminary agreement on the merger, Dutch Prime Minister markrutte wrote on Twitter: "this news is great. It is a rare good thing for Tata Steel's aimeiden steel plant in the Netherlands and the Dutch steel industry."

at the same time, royrickhuss, general secretary of the British steelworkers' Union, also welcomed the news, saying it would bring great benefits to the UK. However, he also pointed out: "the problem usually appears in the details. We are currently seeking further guarantees from Tata Steel UK in terms of employment, investment and future production. We will continue to put pressure on Tata Steel to ensure that it will honor its commitment to invest in the overhaul of No. 5 blast furnace of Port Talbot steel plant." Gregclark, the British Secretary of Commerce, believes that this is a very important step for the Port Talbot steel plant. This agreement is of great significance for the next step of building Talbot port steel plant into a world-class steel manufacturer to produce degradable bio material polyethylene and bio material polymers to replace non degradable food packaging inner plastic. In the future, the joint venture will focus on quality, technology and innovation

after the merger, the problem that the back of the bench and the seat will solidify in the oven is layoffs. The merger of ThyssenKrupp and Tata Steel will inevitably lead to layoffs. Hesingen said in a statement that up to 4000 employees will be laid off in the future, and the layoffs will be carried out "roughly in balance" between the two companies

on the issue of capacity, the chief financial officer of ThyssenKrupp pointed out that the main goal of the merger is to solve the problem of overcapacity in Europe. Moreover, according to industry analysts, no matter how much cost the joint venture will save for both parties, the two companies are unlikely to add more capacity

however, there are also voices of opposition to the "marriage" between ThyssenKrupp and Tata Steel. After ThyssenKrupp and Tata Steel announced the merger of their European steel businesses, the German metal industry Union recently called on the two companies to provide protection for employment, plant operations and future investment planning in the process of merger. Many local steel workers in Germany and workers in Tata Steel's European steel mills opposed the merger of the two companies, fearing that the merger would lead to the loss of jobs

Tata Steel Netherlands said in a company statement that its central working committee expressed deep concern about the independence of the supervisory board of the Dutch company and whether the board of directors, whether structural or functional materials, has suitable people. For this reason, the board of directors and supervisory board of the Dutch company will not support these plans, nor will they accept decisions detrimental to the shareholders and employees of the Dutch company. "We are about to start a long and uncertain journey. Based on the current signs, this journey is unlikely to have a good impact on Tata Steel Netherlands and its employees." The Central Working Committee of the company said

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