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Steel merger offers temporary relief from China

  

The merger of steel giants Tata & Thyssenkrupp in Europe is a huge boost to the continent’s embattled steel industry. In the mills of the UK, Germany and the Netherlands the countries in which the pair have a massive presence there will have been a collective gasp of relief at the news, after a prolonged downturn.
 
Talks started 18 months ago, prompting fears in recent months that they had stalled and could come to nothing. Yet, given the steel industry’s meltdown in the face of an onslaught of cheap Chinese materials, neither side could afford to remain independent.
 
The two have signed a memorandum of understanding for a 50:50 joint venture that welds the continental operations of Germany’s Thyssenkrupp and India’s Tata Steel together, creating a new steelmaking superpower, second only to ArcelorMittal.
 
In a statement, the chief executive of Thyssenkrupp, Heinrich Hiesinger, said the two companies needed to consolidate and become more efficient because of increasing pressure from imports and an overcapacity within the industry.

 
 

 

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