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Shareholders urge ThyssenKrupp to get on with Tata Steel deal- The 19th China£¨Guangzhou£©Int¡¯l Sheet metal machinery,Forging, Stamping and Setting Equipment Exhibition
9/12/2017 îÓ½ðÕ¹-Sheetmetal machinery, Forging, Stamping expo |
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Reuters reported that ThyssenKrupp shareholders are urging the group to clinch a deal with Tata Steel TISC.N to merge their European steel businesses this year, warning failure to do so would be a blow to its credibility. Talks between the two firms over a potential combination have been dragging on for a year and a half, held up mainly by lengthy negotiations to cut Tata Steel¡¯s pension liabilities in Britain that ended with an agreement last month.
A deadline for objections against the agreement ends on September 8th 2017, with no complaints expected, clearing a further hurdle for the two parties to sign a memorandum of understanding and start a detailed look at one another¡¯s books.
A source familiar with the process said this due diligence would start in October, following general elections in Germany later this month, with the subsequent negotiations about further details expected to take several months.
Union Investment fund manager Ingo Speich, referring to Thyssenkrupp¡¯s Chief Executive Heinrich Hiesinger said that ¡°A collapse (of talks) would be very negative for Hiesinger. He has worked on the deal for a long time. The uncertainty is a drag on the share price. A fast agreement would be very helpful.¡±
Thyssenkrupp in which Union Investment is a top 20 shareholder with more than 45 million euros (USD 54 million) worth of stock has seen its shares outperform German blue-chips so far this year. Investors see further upside if a deal is struck.
A top-10 shareholder not authorized to speak about listed stocks on the record said that ¡°Everyone expects that the deal is coming. If that doesn¡¯t happen it would be a disappointment. If there is a successful tie-up there is upside of 10-20 percent for Thyssenkrupp.¡±
Mr Hiesinger has campaigned for a joint venture as his favorite option to reduce Thyssenkrupp¡¯s stake in the volatile steel sector, garnering support from investors but drawing complaints from labor unions that fear layoffs.
Mr Hiesinger has not committed to a timeline for any deal.
Workers also fear Thyssenkrupp could become a minority shareholder in the planned joint venture, which would enable the group to deconsolidate the business and load it with debt to repair its own stretched balance sheet.
That would take away the right to co-determination that German workers enjoy over key corporate decisions.
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