Tata Steel is still in ‘constructive’ talks with German steel major ThyssenKrupp for a strategic collaboration including merger of its European operations, nearly six months after announcing such a plan.
Clarifying on foreign media reports on Tata Steel UK scrapping its merger talks with ThyssenKrupp, the company in a statement on Monday said it continues to be engaged and is in constructive discussion with ThyssenKrupp regarding a potential merger of the steel businesses of the respective companies in Europe.
However, it said there can be no assurance that these discussions will result in a transaction until a definitive agreement is reached.
Tata Steel has made big progress in its move to cut losses at the struggling business in Europe, including sale of long product division to Greybull Capital and signing a definitive agreement with Liberty House earlier last month to sell the speciality steel business to Liberty House for £100 million.
The company could not proceed with the merger of the UK business with ThyssenKrupp due to issues over the employees pension plan.
Tata Steel last month announced that its UK employees have agreed on the proposal to close the existing defined benefit pension plan – British Steel Pension Scheme — and opt for more competitive pension.
Last December, under the chairmanship of Ratan Tata the company agreed to invest £1 billion in the loss-making Port Talbot steel plant over the next 10 years and avoid any compulsory job redundancies. The move was in contrast to the ‘Exit Europe’ adopted by Cyrus Mistry, who was ousted as Chairman of Tata Steel unceremoniously last October.
Tata Steel UK also agreed to operate the existing blast furnace at Port Talbot till 2021 and support employees through future changes by investing in their skills to support further plant upgrades, automation and other digital initiatives.
The company’s scrip was down 0.41 per cent at ₹493 on Monday.