Germany’s ThyssenKrupp AG is in talks with Tata Steel Ltd. of India and other parties on a potential tie-up.
The move signals a new wave of expected consolidation in the beleaguered European steel sector, the Wall Street Journal reports.
It comes amid a flurry of mergers and acquisitions by European steel makers to cope with a protracted capacity glut and a wave of inexpensive steel imports from countries such as China, the world’s largest steel producing nation.
“We have repeatedly emphasized that in this situation we believe a consolidation of the European steel industry is necessary,” a spokeswoman for ThyssenKrupp said.
“Among others, we are also in talks with Tata Steel.”
The spokeswoman cautioned that it was still unclear “when and with whom” such a merger could transpire.
Tata Steel said last week that it was in talks with ThyssenKrupp about creating a European flat-steel-products joint venture, prompting the German company’s confirmation on Monday.
In April, The Wall Street Journal reported that the two companies had been holding high-level talks for more than a year about combining their European steel operations.
At that time, Tata Steel had only planned to combine its Dutch assets with ThyssenKrupp’s steel assetsin Germany while hiving off its ailing UK business to other parties.
Tata Steel, however, changed tack last week and said it would now include a sizable part of its UK business in the sale process as well.
This includes a series of plants dotted throughout Britain that employ 9,000 people, including Britain’s biggest plant, in Port Talbot, Wales.
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