Steel group merger under threat

Tata Steel’s merger with Germany’s Thyssenkrupp steel operations division could be under threat as negotiations falter.

Complex discussions around pensions and difficulties with German trade unions have caused the slowdown, said the Guardian.

The ongoing troubles surrounding Tata’s pension schemes have not gone away, said the UK Pensions Regulator, despite Tata workers voting for pension cuts earlier this year

IG Metall, Germany’s largest trade union, said that the merger was “high risk” and that it would be opposing it, citing potential job losses in the German steel industry.

In the event that the Tata Steel and Thyssenkrupp merger falls apart then Tata will be faced with forging ahead with turnaround plans alone or looking for another partner.

Tat told the Guardian : “We continue to be engaged in constructive discussions with Thyssenkrupp regarding a potential merger of the steel businesses of the respective companies in Europe. However, until a definitive agreement is reached, there can be no assurances these discussions will result in a transaction.

“Meanwhile, Tata Steel UK continues to be deeply engaged with the pension scheme trustee, the trade unions and relevant regulatory and government bodies to identify the best prospects for the future sustainability of its UK operations and a fair and practical outcome for the members of the British Steel Pension Scheme.”

Tata’s speciality steels division has sites in Rotherham, Stocksbridge and Brinsworth in South Yorkshire. It was sold earlier this year in a £100m deal to Liberty House, safeguarding nearly 2,000 jobs.