Thyssenkrupp abandons Tata merger plans, cuts 6000 jobs

Thyssenkrupp abandons Tata merger plans, cuts 6000 jobs

The 50:50 joint venture (JV) signed between Tata Steel and thyssenkrupp in June a year ago to create a pan-European collaboration by combining the businesses of both the companies is off the table now, after the European Commission indicated that it is unlikely to clear the deal.

The group will adopt a holding structure and plans to list its elevators unit, its most successful business.

"Under these conditions, a separation is no longer the best solution for Thyssenkrupp".

It expects to keep a majority of its steel and materials trading divisions in the long-term. In the new company, based in the Netherlands Thyssenkrupp 50 percent of the shares should hold. Back home, the markets reacted sharply and Tata Steel, which proposed to transfer a debt of Euro 2.5 billion into the JV, saw shares going down 6% on the BSE on Friday. "This strategy will continue to guide us and I'm confident we will chart a strong path forward for all our stakeholders", said Hans Fischer, CEO of Tata Steel's European operations.

Tata Steel termed the proposed JV as an important strategic initiative for the company to create a sustainable portfolio in Europe, and now it being thrown off-track, it said it would explore all options to achieve similar outcomes in the future.

The JV was expected to combine the European steel businesses of the Tatas with the German firm to create Thyssenkrupp Tata Steel.

"It is clear that Thyssenkrupp has failed with its previous strategy", Lars Foerberg of Cevian Capital, Thyssenkrupp's second largest stockholder, told the daily Rheinische Post.

The German steel giant said that the European Union took the improvements of the submitted covenants proposed by ThyssenKrupp and Tata Steel as an opportunity to conduct another market test.

Thyssenkrupp's net debt had almost doubled to 4.68 billion euros by the end of its fiscal first quarter, compared with the end of its 2017/2018 business year - more than 4 times its expected adjusted EBIT (earnings before interest and tax) for the current fiscal year. Asked whether the Tatas would continue to operate the Port Talbot plant in Wales that suffered a fire episode recently, the management said it expected the operations to become cash positive in order to remain sustainable.

However, rising trade tensions between the United States and China and fears of a disorderly Brexit have dented share prices, forcing a number of companies, including Continental and Volkswagen, to review plans for spin-offs and listings.

The group now expects adjusted Earnings Before Interest and Taxes (EBIT) of between €1.1 and €1.2 billion ($1.2 and $1.3 billion), which includes the steel division, in the financial year 2018/19.



Related Posts

Motorola One Vision Renders Leaked: Know Price, Specification
So far, several leaks have confirmed that the phone will feature a punch-hole design and a 48MP dual-lens rear camera. According to renders , the Motorola One Vision will feature a punch hole display and a sizeable bottom bezel.

Iran Officials Tell President Trump Not to Bother Making a Phone Call
He said the USA position will weaken with time, and that there are now no grounds for negotiations with Washington . Trump also called on Iran to sit down and re-negotiate the 2015 nuclear deal, which he quit previous year .

Russell Rejoins Cubs After 40-Game MLB Domestic Violence Ban
The league got involved after Russell's now ex-wife, Melisa Reidy, detailed specific instances of Russell's abuse in a blog post. When speaking about Russell and Zobrist, Manager Joe Maddon said "you don't run away quickly because something has gone awry".

Trump welcomes Red Sox contingent to the White House
He also defended his administration's relief efforts in Puerto Rico, which was a primary reason for Cora not to attend. A derogatory shout about the Red Sox's rival, the New York Yankees , was heard.

YouTuber James Charles Loses More Than A Million Subscribers In A Day
He called his former mentor "an incredible person" and that she "truly does want the best for everybody around her". For all those who have NFI when it comes to the ever-dramatic world of YouTuber drama, here's a quick rundown .

Police charge stepfather of missing Texas girl with evidence tampering
In the silver Nissan, police found a laundry basket that looked like the one Vence took out of his apartment, Stayton said. He then claimed to be knocked unconscious by three Hispanic men who pulled up in a blue pickup truck, he told police.

Trump may provoke U.S. lawmakers to impeach him: senior Democrat
Barr's Department of "Justice" claims that it can not indict Trump, all the while preventing Congress from discovering the truth. Jerrold Nadler (D-N.Y.) on Capitol Hill in Washington on December 20, 2018.

ASUS Zenfone 6 Double Slider design reaffirmed in a leaked video
The phone is expected to feature a Full HD+ display and will come packed with 6 GB of RAM and 128 GB of internal storage. While the launch of the Zenfone might be overshadowed by the OnePlus 7, Asus has already lined up OnePlus in its sights.

Chris Attoh's wife shot dead in America
NAIJ reports that Attoh had been in Los Angeles on a movie set but flew straight to Maryland upon hearing the tragic news. Multiple media reports stated that Jenifer was found suffering from gunshot wounds and was declared dead at the scene.

Manuel Pellegrini still excited over Jack Wilshere’s potential impact
Noble scored twice in an impressive win for Manuel Pellegrini's side, with Manuel Lanzini and Marko Arnautovic also on the score sheet at Vicarage Road .

© 2015 . All Rights reserved.