Thyssenkrupp AG (TKA.XE) said late Thursday that it reached a collective agreement with German trade union IG Metall on the planned merger of its European steel business with Tata Steel Ltd. (500470.BY), applying to all of Thyssenkrupp's German steel sites.
The settlement assures the continuation of employment until Sept. 30, 2026 for the roughly 28,000 employees of Thyssenkrupp's steel operations, the German company said. Previously announced job cuts of up to 2,000 will be carried out in a manner that is socially responsible, it said.
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Activity in the majority of sites will also be assured until Sept. 30, 2026, Thyssenkrupp said, although it will review the profitability of specific units at three plants in 2020 to decide whether they will keep operating.
The steelmaker said it plans to continue investing at least 400 million euros ($474.8 million) per year in its German sites.
Thyssenkrupp and Tata will each hold a 50% stake in the future joint venture for at least six years. In case of an initial public offering of the steel joint venture, both companies would be required to hold at least a combined 50.1% stake in the new company, meaning that Thyssenkrupp and Tata could reduce their holdings to no less than 25.05% each if the joint venture goes public, Oliver Burkhard, Thyssenkrupp's chief human resources officer said in a call to journalists.
The agreement, which IG Metall's collective-bargaining committee recommends its members accept, will be put to a vote in January.
Thyssenkrupp also said that it aims to sign the merger agreement in early 2018 and expects to close the deal by the end of 2018, once it receives regulatory approval.
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(END) Dow Jones Newswires
December 22, 2017 06:34 ET (11:34 GMT)