In a major development of the corporate world, the Germany’s Thyssenkrupp AG and India’s Tata Steel Ltd signed an agreement to establish a long-expected steel joint venture.
The final agreement took months in making and came about after long and hectic negotiations.
The initial agreement, it need be mentioned, was announced way back in September.
The new company will be called ThyssenKrupp Tata Steel BV and will be based in Netherlands.
The merged entity will have capacity to produce 21 million tons of steel a year, making it the second largest steelmaker in Europe after ArcelorMittal.
The two companies are said to have come together as part of their response to volatile steel industry including overcapacity.
Tata Steel chairman Natarajan Chandrasekaran, in a statement said the joint venture will create “a strong pan-European steel company that is structurally robust and competitive”.
The deal is also crucial amid the tariffs of 25 percent on the exports to the US.
The Us has been their biggest market for quite some time.
The German group also said it now expects annual synergies of €400 million to €500 million from the transaction.
It was informed that the Tata Steel’s Dutch unit would be part of the joint venture’s cash-pooling mechanism.>