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Thyssenkrupp to set up working group with unions over Tata Steel merger

Stock MarketsSep 23, 2017 11:47PM ET
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© Reuters. Thyssenkrupp steel workers hold protest rally in Bochum

FRANKFURT (Reuters) - Thyssenkrupp AG (DE:TKAG) is to set up a joint working group of board members and labor representatives to help implement the plan to merge with Tata Steel (NS:TISC), it said in a statement published on Sunday after a supervisory board meeting.

The meeting was held after Thyssenkrupp top management's move this week to sign a memorandum of understanding with Tata Steel for a 50-50 joint venture.

If approved, it would create Europe's second-biggest steelmaker after ArcelorMittal (AS:MT), with combined sales of about 15 billion euros.

The working group will consist of members of the executive boards of Thyssenkrupp AG, Thyssenkrupp Steel Europe, which is the unit for the steel activities within the wider group, representatives of Thyssenkrupp's works councils and the works councils of the steel sites, the statement said.

The working group will be headed by Markus Grolms, deputy chairman of the supervisory board of Thyssenkrupp AG and Oliver Burkhard, member of the executive board of Thyssenkrupp AG, where he is chief human resources officer, it said.

Thyssenkrupp AG Chief Executive Heinrich Hiesinger depends on the support of labor representatives, who hold half of the 20 seats on the group's supervisory board and have fiercely opposed the deal with Tata Steel.

On Friday, several thousand steel workers took to the streets of Bochum in Germany's industrial heartland to protest against the deal, which would include up to 4,000 job cuts, about eight percent of the combined workforce.

Opposition from Thyssenkrupp's workforce could mean prolonged negotiations with management and delay any approval of the plan by the supervisory board, scheduled for early next year.

If all labor representatives on the supervisory board vote against the plans, its chairman Ulrich Lehner could still push them through with his casting vote but it is Hiesinger's declared goal to get labor leaders to agree.

Meanwhile, Swedish finance investor Cevian, that holds a minority share in Thyssenkrupp, came out in support of Hiesinger's plan for merging the steel unit with Tata Steel, according to a report in the mass weekly Bild am Sonntag.

It quoted a Cevian source as saying, "Splitting off the steel unit means a bigger focus on the (Thyssenkrupp's) industrial business."

"If the financial conditions are right, Cevian considers this option (the merger) good."

Thyssenkrupp, whose other operations span car parts, elevators, construction steel and submarines, has faced calls to split off other parts of the business, most notably its elevator unit.

Thyssenkrupp to set up working group with unions over Tata Steel merger
 

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