First stage of Tata’s merger with German steel maker ThyssenKrupp ‘agreed’

The first stage of Tata Steel’s proposed merger with German steelmaker ThyssenKrupp looks set to be agreed.

According to BBC Wales an announcement will be made early on Wednesday.

Despite being opposed to the move Thyssenkrupp’s works council is prepared to consider a merger with Tata Steel.

Chief Executive Heinrich Hiesinger has said a joint venture is the best way to take overcapacity out of the volatile steel market and said he has no plan B.

Labour leaders in Germany have campaigned against the move for months on fears of job losses.

Tata’s £15bn pension scheme had been a major sticking point with ThyssenKrupp however since the British Steel Pension Scheme (BSPS) announced that terms had been agreed to separate the pension from Tata Steel merger plans moved a step closer.

The two firms are expected to sign a memorandum of understanding (MoU) that would see each company take a detailed look at each other’s books which would then lead to formal negotiations.

In April, unions expressed fears a merger would be “high risk” and could lead to job losses.

IG Metall union, which represents metalworkers in Germany, is concerned the joint venture could pave the way for ThyssenKrupp to exit the steel business entirely.