"Under the planned joint venture, we are giving the European steel activities of thyssenkrupp and Tata a lasting future. We are tackling the structural challenges of the European steel industry and creating a strong No. 2," said thyssenkrupp chief executive Heinrich Hiesinger. 

"In Tata, we have found a partner with a very good strategic and cultural fit. Not only do we share a clear performance orientation, but also the same understanding of entrepreneurial responsibility toward workforce and society," he said.
 
Called thyssenkrupp Tata Steel, the new business would generate approximately EUR15 billion in sales and ship approximately 21 million metric tons annually. It would be headquartered in Amsterdam and employ about 34,000 people across 34 locations. 

"This partnership is a momentous occasion for both partners, who will focus on building a strong European steel enterprise. The strategic logic of the proposed joint venture in Europe is based on very strong fundamentals, and I am confident that thyssenkrupp Tata Steel will have a great future," said Tata Steel chairman Natarajan Chandrasekaran. 

Executives said the deal holds a potential EUR400 million to EUR600 million in synergies. However, leveraging those syneriges would entail the elimination of up to 4,000 jobs – 2,000 in administration and potentially up to 2,000 in production. 

And therein potentially lies one of the biggest obstacles to the deal, reports The New York Times. ​According to The Times, employee representatives hold half of thyssenkrupp’s supervisory board seats, and German unions might push back against plant closures or layoffs. 

"By announcing the deal in the run-up to German federal elections on Sunday, thyssenkrupp also risks making it a political issue. It has already attracted criticism from Germany’s labor minister, Andrea M. Nahles," The Times reported.  

"There must not be a merger at any price,” Nahles said in a statement, The Times said, citing a Reuters report. “The sites in Germany must be maintained and compulsory redundancies must be ruled out."

Nevertheless, thyssenkrupp's works council on Wednesday said it would at least consider the plan.  

"Negotiations will be difficult," Wilhelm Segerath, head of thyssenkrupp’s works council and member of the group’s supervisory board, told reporters, according to London business newspaper City A.M.

"We will examine it, and if in the end our conditions are fulfilled and the whole unit is debt-free, then it’s a possibility."

Although labor has been skeptical, analysts are behind the deal. 

Berenberg’s Alessandro Abate told the (London) Financial Times that if thyssenkrupp can execute a deal, it would mark "one of the most complex corporate turnarounds in the history of the EU steel sector."

And for Tata, it would be a "glorious exit from likely the most painful M&A deal in the EU steel history," he told the newspaper, referring to its poorly timed 2007 acquisition of Corus.