Tata Steel moves up on inking MoU with thyssenkrupp AG to form JV

Tata Steel is currently trading at Rs. 682.35, up by 5.80 points or 0.86% from its previous closing of Rs. 676.55 on the BSE.

The scrip opened at Rs. 677.90 and has touched a high and low of Rs. 689.75 and Rs. 674.30 respectively. So far 201534 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 692.00 on 12-Sep-2017 and a 52 week low of Rs. 359.40 on 20-Sep-2016.

Last one week high and low of the scrip stood at Rs. 689.75 and Rs. 670.00 respectively. The current market cap of the company is Rs. 66591.39 crore.

The promoters holding in the company stood at 31.85%, while Institutions and Non-Institutions held 44.01% and 23.06% respectively.

Tata Steel has signed a Memorandum of Understanding (MoU) with thyssenkrupp AG to create a leading European steel enterprise by combining the flat steel businesses of the two companies in Europe and the steel mill services of the thyssenkrupp group. The proposed 50:50 joint venture - thyssenkrupp Tata Steel - would be focused on quality and technology leadership, and the supply of premium and differentiated products to customers, with annual shipments of about 21 million tonnes of flat steel products.

The joint venture (JV) would have a pro forma turnover of about 15 billion euro per annum (Rs 115,000 crore) and currently employs about 48,000 people spread across various locations. It would be headquartered in the Amsterdam region of the Netherlands. The proposed combination of businesses would be formed through a non-cash transaction framework, based on fair valuation where both shareholders would contribute debt and liabilities to achieve an equal shareholding in the venture.

thyssenkrupp Tata Steel would have a robust capital structure that is well matched by the underlying free cash flows of the company. It would benefit from the scale and distribution network capability of the combined assets to achieve quality, technology and cost leadership in the European steel industry. It is also the clear intent of both partners to remain as long term investors and continue the present network configuration of all the upstream hubs in the proposed joint venture company.

Tata Steel, the flagship company of the Tata group is the first integrated steel plant in Asia and is now the world’s second most geographically diversified steel producer and a Fortune 500 Company.