Tata Steel is said to be considering taking a majority stake in its venture with Germany's Thyssenkrupp. According to a report, the Indian steel major may be open to taking a larger portion of the business than the 50 per cent stake it will receive under the joint venture, once the entity is publicly listed. This will depend on how well its operations are doing in India and market conditions at the time of the float.
The deal to merge European assets with Thyssenkrupp and create a £13.3 billion a year industry giant, was first announced in last September. It was seen as a defensive move by both, Tata and Thyssenkrupp in the face of fierce competition from Chinese steelmakers. It had, however, been expected that the new company - which will be called Thyssenkrupp Tata Steel, would eventually be separated off from the two parent businesses, either through a sale or a flotation. Tata was assumed to be using the mega-merger in an effort to draw a line under its foray into the European steel sector, which has caused it to incur huge losses and writedowns. Thyssenkrupp however, had been understood to be looking to focus more on its profitable capital goods operations. Sources however, said, “Thyssenkrupp is looking to exit the steel sector while Tata is looking to stay and grow.”
