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  Business   Companies  17 May 2017  Tata Steel, Thyssenkrupp merger halt after workers protest

Tata Steel, Thyssenkrupp merger halt after workers protest

REUTERS
Published : May 17, 2017, 1:27 pm IST
Updated : May 17, 2017, 1:27 pm IST

Thyssenkrupp is opposed to taking on 15 billion pounds ($19.4 billion) in UK pension liabilities.

Representational Image
 Representational Image

Tata Steel's latest pensions deal in Britain does not lessen Thyssenkrupp workers' opposition to a possible merger of the two companies' European steel operations, Thyssenkrupp's works council chief said.

"Now a joint venture really doesn't make any sense," Wilhelm Segerath told Reuters on Wednesday.

Tata on Tuesday agreed the main terms of a deal to cut benefits for its British pension scheme, which had been seen as a major stumbling block in the merger talks because Thyssenkrupp is opposed to taking on 15 billion pounds ($19.4 billion) in UK pension liabilities.

Under the deal, Tata will plough 550 million pounds into the British Steel Pension Scheme (BSPS). At the same time, Tata will give the BSPS a 33 percent equity stake in its UK business.

"That doesn't remove the risk posed by the pension liabilities," Thyssenkrupp's Segerath said.

Tags: thyssenkrupp, tata steel, british steel pension scheme