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>> Part of a dynamic process of change.>> A 50/50 venture to create Europe's number two steelmaker. Germany's Thyssenkrupp and India's Tata Steel are addressing overcapacity in the region's steel market, which faces cheap imports from China plus subdued demand for construction.>>
> This is the best solution for our steel business and the best solution for our group as a whole.
Thyssenkrupp remains involved in the steel industry. And with the partnership deal signed today, we found a European solution for a European industry that has a prospect for us, our clients, and our employees, and of course, also for our shareholders.>> The deal will involve no cash. Both groups say they'll contribute debt and liabilities to achieve an equal shareholding.
That's good news for Thyssenkrupp, which will be freed from 4 billion euros in mostly pension liabilities. The news pushing its shares up 4%, shares in Tata Steel were up 0.7%. Tata Steel Europe has been a strain on its parent company Tata Steel for a decade. It's been burning cash at a rate of around $1 billion a year.
The new company to be named Thyssenkrupp Tata Steel will be based in Amsterdam. Once approved, it will create annual synergies of between 4 and 600 million euros. But at a cost, up to 4,000 jobs could be cut. That's around 8% of the joint workforce. And that won't go down well in the UK, where last year, Tata Steel made a promise to safe guard jobs at Britain's largest steelworks in Wales.