March 3, 2017 / 7:18 AM / 3 years ago

Thyssenkrupp eyes Plan B for European steel: report

The logo of German steel-to-elevators group ThyssenKrupp AG is pictured during the company's annual news conference in Essen, Germany, November 24, 2016. REUTERS/Wolfgang Rattay/File Photo

FRANKFURT (Reuters) - Germany’s Thyssenkrupp (TKAG.DE) has looked at the option of splitting its European steel business into a separate company that could be floated if a merger with Tata Steel (TISC.NS) assets fails, German weekly WirtschftsWoche reported on Friday.

The report, which did not cite sources, said a merger was still the preferred option but that investor pressure could force Chief Executive Heinrich Hiesinger to consider another route.

“There is no new status,” a spokesman for Thyssenkrupp told Reuters.

Thyssenkrupp and Tata have been talking for over a year about merging their European steel units to cut costs and overcapacity, but the plan is complicated by Tata’s huge pension deficit in Britain.

Hiesinger said at the German industrial group’s annual shareholders’ meeting on Jan. 27 that he would not be pressured to rush a deal with Tata, but there was no “Plan B” for the steel business.

He also told German daily Handelsblatt on Feb. 23 that the company was prepared to move forward on its own if necessary but would prefer consolidation. He also said that Thyssenkrupp would remain part-owner of the steel business in any merger scenario.

Reporting by Maria Sheahan; Editing by Alexander Smith

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