The bosses of India’s Tata Steel and Germany’s Thyssenkrupp defended the joint venture between the two companies in a press conference today.
On Saturday the pair struck a 50-50 joint venture deal to combine their European businesses into the second-largest steel-maker in Europe behind Arcelormittal.
The joint venture, Thyssenkrupp Tata Steel, will have a workforce of approximately 48,000 and annual revenues of €15bn (£13.3bn).
In a press conference today Thyssenkrupp chief executive Heinrich Hiesinger defended the deal.
“We want to form a new steel champion,” he said, “there is tremendous value to be created.”
Thyssenkrupp was criticised by some of its shareholders for giving away too much in the deal given that its plants are more profitable than Tata’s.
In the face of such criticism, in the event that the combined company floats, Thyssenkrupp will receive 55 per cent of the proceeds to reflect its greater contribution.
Hiesinger said the deal was a “fair representation” to close the millions of euros valuation gap between the pair.
“Our supervisory board ... including their advisers came to the same conclusion. And we stick to their judgement,” he said.
The deal has been criticised by Thyssenkrupp investors Elliott Advisors and Cevian Capital.
Thyssenkrupp’s share price was down 0.19 per cent this afternoon while Tata Steel’s fell 1.52 per cent today.
The deal follows the US confirmation last month that it was imposing a 25 per cent tariff on steel and a 10 per cent tariff on aluminium imports from the EU, Mexico and Canada.