London: Tata Steel could be considering withdrawing from talks on a planned merger of its European business with German conglomerate Thyssenkrupp, British media reported on Sunday.
The Sunday Times newspaper said that Tata Steel is considering a “daring plan to break off a planned merger” of its European business with those of the German conglomerate.
Such a deal with the German steel giant, talks on which were announced by Tatas last year, could lead to the formation of a European steel behemoth with blast furnaces in Wales, the Netherlands and Germany.
According to the paper, however, the deal has been taking time to close as Tata Steel tries to solve the problem of its 15 billion pounds British steel pensions scheme.
The company has been engaged with stakeholders in Britain to find a structural solution and a way forward with regard to the affordability of the legacy pension scheme liabilities.
Earlier this year, ThyssenKrupp had said Tata Steel would have to find a “viable solution” for its “high pension obligations” in Britain before going ahead with their consolidation talks.
Last month Tata Steel UK’s nearly 10,000 workers had voted in favour of moving from a final salary pension to a less generous scheme in return for job safety and the company’s promise of nearly a billion pounds’ worth of investment over the next 10 years.
The Sunday Times said Dutch unions representing workers at Tata’s Ijmuiden plant have raised concerns over the Thyssenkrupp pensions, which are an unfunded liability and sustained by cash-flow from the steelworks.
Tata Steel has said it is in talks with Thyssenkrupp to find a sustainable solution for the pension scheme issue.