International Steel Mills
Thyssenkrupp, Tata Steel Merger Moves a Step Closer
Written by Sandy Williams
August 12, 2017
Thyssenkrupp CEO Heinrich Hiesinger told analysts this week that the Tata merger would be an important milestone for the company, but other options are available if it doesn’t occur. The German CEO hopes to concentrate on Thyssenkrupp’s diversified industrial portfolio by folding its steel business into a joint venture with India’s Tata Steel.
Hiesinger said he didn’t want to be pressed for a timetable, stressing the quality of the deal was more important than the timing. “For us, it’s quality before time,” he said. “We won’t give you an exact time frame because it takes as long as it takes. We will do what is needed. You can be sure that we would like to get it rather sooner than later.”
Heisinger may get his wish for “sooner than later.” New developments on Friday may clear the way for the merger.
Holding up the deal is Tata’s search to find funding for the $19 billion pension deficit for its UK employees. On Friday, Aug. 11, Tata Steel received approval from The Pensions Regulator, the UK’s regulator of workplace pensions, to pay $713 million into the British Steel Pension Scheme, as well as giving it a 33 percent equity stake in Tata Steel UK Ltd.
Tata said the regulated apportionment arrangement (RAA) will offer more “sustainable outcomes” for pensioneers and employees. Upon completion of the RAA, members of the BSPS could remain in the scheme or transfer to a new one that will be sponsored by Tata Steel UK.
Lesley Titcomb, chief executive of TPR, said: “We do not agree to these types of arrangements lightly, but after several months of robust negotiations in this case, we believe it is the best possible outcome for everyone involved in what is a very difficult situation.”
“This proposal brings greater certainty for pension scheme members and unlocks the possibility of restructuring the company, which in turn could lead to preserving jobs,” added Titcomb.
Formal approval of the plan is expected by The Pensions Regulator in 28 days if it is not disputed by any stakeholders.
Thyssenkrupp told Reuters on Friday that it will need to closely examine the pension agreement before making a merger decision.
Sandy Williams
Read more from Sandy WilliamsLatest in International Steel Mills
Bula tapped as CEO of Finland’s Blastr
Bula tapped as CEO of Finland's Blastr
USW claims Nippon prioritizing Japanese ops in US tin mill trade case
The United Steelworkers (USW) union is calling out Nippon Steel for already prioritizing its Japanese operations at the expense of American workers despite forging ahead with its proposed plan to purchase U.S. Steel.
Japan’s Kishida and Biden to meet amid tensions around USS sale
Japanese Prime Minister Fumio Kishida will be in Washington this week where one topic under discussion with President Biden will be U.S. Steel's proposed sale to Nippon Steel.
CRU: SSAB to switch to CO2-free EAF steelmaking at Lulea works
Directors of Swedish steelmaker SSAB have decided to replace blast furnace-based steelmaking at Lulea with a ‘green steel’ mini-mill process.
Senator asks Biden to probe Nippon’s ties to China
A prominent US senator has asked the White House to investigate Nippon Steel Corp.’s (NSC) ties to China as the Japanese steelmaker seeks to acquire U.S. Steel.