December 22, 2017 / 10:46 AM / a year ago

Thyssenkrupp could halve stake in Tata Steel JV

FILE PHOTO: 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) - Thyssenkrupp could halve its stake in a planned European steel joint venture with Tata Steel if they list it on the stock market by end-2024, a board member of the German industrial group said on Friday.

The two have committed to holding equal stakes for the first six years of the company’s existence, Thyssenkrupp personnel chief Oliver Burkhard told journalists on a call.

In case of a stock market listing, they are to retain at least a 50.1 percent stake, he said, meaning Thyssenkrupp could reduce its stake to 25.05 percent.

Thyssenkrupp a day earlier reached a deal with steel workers to secure jobs and plants, a key condition for the joint venture, which will create Europe’s second-largest steelmaker, to go ahead next year.

Shares in Thyssenkrupp were down 0.9 percent at 1309 GMT, leading decliners in a flat German market.

Traders and analysts said unions had been able to extract far-reaching commitments from management.

“The likelihood of the joint venture’s creation has increased, which we welcome,” said Sven Diermeier, senior analyst at Independent Research. “However, the flexibility of the entity and Thyssenkrupp is constrained by the agreement.”

The agreement with unions foresees no forced layoffs or major site closures before September 2026, labour representatives and the company said.

It still requires approval from the members of IG Metall, Germany’s most powerful union, which will cast their votes between Jan. 13 and Feb. 2.

Reporting by Christoph Steitz; editing by Arno Schuetze and Jason Neely

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