Report: Tata Steel, thyssenkrupp Might Bring European Operations Together
04/01/2016 - As India’s Tata Steel looks to exit the United Kingdom, it’s reportedly considering a new direction for its other European assets.
According to reports, the steelmaker has been in discussions with Germany’s thyssenkrupp AG on a possible tie-up with that company’s European steel division. German newspaper Rheinische Post first reported on the talks, and a subsequent account in The Wall Street Journal said the two companies have been holding high-level discussions for more than a year.
Unidentified sources told the Reuters news service that no deal was yet in sight, adding that all of Europe's steel producers have been talking to one another amidst the global steel industry’s troubles.
As for Tata’s U.K. business, the U.K. government is now leading an effort to find a buyer or buyers for the operation, according to The Guardian newspaper. The operation includes the integrated Port Talbot works, Great Britain’s largest.
But whether the government is successful remains in doubt. Sources inside the company told the newspaper that despite having looked for the past 18 months, Tata hadn’t been able to find a buyer.
U.K. Prime Minister David Cameron said on 31 March that although the government is doing everything it can to preserve jobs at the operation, there is no guarantee that it will be successful, The New York Times reported. His comments followed an emergency cabinet meeting to discuss the crisis.
The (London) Telegraph said any bid to save the business could be hindered by its GBP15 billion pension plan. The plan, as of last March, has a deficit of GBP485 million.
There have been calls to nationalize the operation, but Cameron has said he is opposed to taking that course of action.
“I don’t believe nationalization is the right answer,” Cameron said, according to BloombergBusiness. “What we want to do is secure a long-term future for Port Talbot and for other steelmaking plants in the United Kingdom.”
Unidentified sources told the Reuters news service that no deal was yet in sight, adding that all of Europe's steel producers have been talking to one another amidst the global steel industry’s troubles.
As for Tata’s U.K. business, the U.K. government is now leading an effort to find a buyer or buyers for the operation, according to The Guardian newspaper. The operation includes the integrated Port Talbot works, Great Britain’s largest.
But whether the government is successful remains in doubt. Sources inside the company told the newspaper that despite having looked for the past 18 months, Tata hadn’t been able to find a buyer.
U.K. Prime Minister David Cameron said on 31 March that although the government is doing everything it can to preserve jobs at the operation, there is no guarantee that it will be successful, The New York Times reported. His comments followed an emergency cabinet meeting to discuss the crisis.
The (London) Telegraph said any bid to save the business could be hindered by its GBP15 billion pension plan. The plan, as of last March, has a deficit of GBP485 million.
There have been calls to nationalize the operation, but Cameron has said he is opposed to taking that course of action.
“I don’t believe nationalization is the right answer,” Cameron said, according to BloombergBusiness. “What we want to do is secure a long-term future for Port Talbot and for other steelmaking plants in the United Kingdom.”
