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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.
