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Possible Merger between ThyssenKrupp and Tata Steel Invigorates Stock Trade

The possibility of a joint venture between the steep divisions of ThyssenKrupp and Tata Steel invigorated the share value of the largest German steel company by 5% to EUR 23.58. In addition to the announcement of a possible merger, Thyssen Krupp presented cost saving plans. These plans are to save almost EUR 500 million in the European steel industry over the next three years. They will make it possible to cut 4,000 jobs of the 27,000 jobs in German locations. The works council and the employees have announced countermeasures.

Some items needs to be clarified, however, before a merger can take place. The question of how to deal with Tata Steel’s pension burden of US$ 17.5 remains unanswered. In addition, the situation under anti-trust law will have to be clarified. Even though the planned merger was announced last year, it still seems to be in the distant future.

 

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