According to Tata, the U.K. Pensions Regulator has approved what’s known as a regulated apportionment arrangement. The agreement splits the pension plan from the company. 

As part of the agreement, Tata has paid GBP550 million into the plan and given it a block of shares amounting to a 33% stake in Tata Steel UK. 

The agreement removes a significant obstacle to a potential combination of Tata’s European business with thyssenkrupp’s steel operations. 

Indeed, an agreement in principle on a business combination could be reached this month, according to the Reuters news service.