ThyssenKrupp said Monday it could agree a joint venture deal with Tata Steel by the end of this month, after the UK pensions regulator approved a regulated apportionment arrangement for the latter.
"Talks with Tata are constructive, negotiations are well on the way. It is expected that board approval will be provided upon conclusion. An agreement could be possible before the end of this month," a ThyssenKrupp spokesperson told S&P Global Platts.
A Tata Steel spokesman said "constructive discussions" were ongoing with a view to merging the European steel businesses of the companies, but there was no guarantee of a deal being done.
While most analysts and market participants say the European steelmaking sector needs to be more consolidated, workers in Germany and the Netherlands have voiced their opposition to the deal, citing concerns over production closes and job losses.
One source in Ijmuiden said the deal would not be good for the future, especially as Tata has addressed many of the issues facing it -- such as the hiving off of the pension scheme.
Tata said the new pension scheme would pose "significantly less risk for Tata Steel UK" as it would have lower future annual increases for pensioners and deferred members than the old scheme.
It has made a GBP550 million ($727 million) payment to the scheme and the equivalent of a 33% economic equity stake has been made to the British Steel Pension Scheme Trustee under the agreement.
