German rival Thyssenkrupp confirms it is in talks with Tata Steel over European collaboration

 
Francesca Washtell
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A Tata-Thyssenkrupp joint venture could be on the cards (Source: Getty)

German steelmaker Thyssenkrupp AG has confirmed it is in collaboration talks with Tata Steel.

On Friday, Tata Steel announced it had paused the sale of its UK assets and was holding talks with potential partners, including Thyssenkrupp, about “alternative and more sustainable” models for its European business.

Tata said it was reviewing its sale options “in the light of the uncertainties caused by the UK referendum” and the outcome of the government’s consultation on the British Steel Pension Scheme.

Read more: Union urges Tata to end "rollercoaster of uncertainty" as it halts UK sale

A spokeswoman for Thyssenkrupp said the company, which is Germany’s largest steelmaker, was talking to Tata Steel, among others. She also said Thyssenkrupp has long believed a consolidation of the European steel industry is “necessary” due to the difficult economic conditions facing manufacturers, Reuters reported.

Tata Steel’s UK operations include the Port Talbot steelmaking plant, but the company also owns a facility in Ijmuiden in the Netherlands.

Read more: Trustee warns over future of the British Steel Pension Fund

Tata has said the talks could result in a joint venture, although they are still at a preliminary stage, and are in addition to the efforts to sell the business that started in March.

Seven bidders were taken forward to the second stage of the sales process in early May.

These included global metals investor Liberty House, management buy-out team Excalibur Steel, and Greybull Capital, which bought Tata’s Scunthorpe long-products plant for £1 in April and a £400m finance package was put in place in late May.

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