Indian-owned Tata Steel – which owns the remnants of British Steel in the UK – and Germany’s Thyssenkrupp have confirmed plans for a merger.
In a statement today, Thyssenkrupp said the pair have signed a memorandum of understanding (MoU) to combine their European steel operations in a 50-50 joint venture.
The German company said the combination will lead to annual synergies of 400-600mln euros, adding that up to 4,000 jobs would have to be cut, about 8% of the joint workforce.
Merger talks are understood to have started around 18 months ago after Tata – which owns the Port Talbot Steel Works in South Wales - decided not to sell its UK steel business.
Tata hit the headlines last year when it put its entire UK operations up for sale amid a deteriorating industry environment.
But the Indian-owned firm put its plans on hold after pledges of support from the UK government and an agreement to restructure its hefty pension scheme.