DUESSELDORF (Reuters) - Thyssenkrupp’s (TKAG.DE) needs to quickly clinch a deal for a planned European steel joint venture with Tata Steel (TISC.NS), its chief executive said in an internal letter, adding this was necessary to determine the group’s long-term strategy.
“Therefore we are in close consultations with the supervisory board,” Heinrich Hiesinger wrote in a staff note dated June 14, a day after the group’s supervisory board met to discuss the deal.
Thyssenkrupp, under pressure from activist shareholders Cevian and Elliott as well as powerful unions, has less than two weeks to get the deal through its supervisory board in order to hit a self-imposed end-June deadline.
Talks have dragged on for more than two years and hit a further snag over the valuation of European steel assets, which have performed differently for Tata Steel and Thyssen since the initial deal was first announced in September.
“The process is taking significantly longer than anticipated by us in the beginning,” Hiesinger said in the staff note that was obtained by Reuters, adding the was aiming for a “constructive dialogue with all investors”.
Activist shareholders have criticised Hiesinger for not being fast and successful enough in his restructuring efforts, and have urged the conglomerate’s leadership to seek better terms for the planned steel tie-up.
Writing by Christoph Steitz; Editing by Edward Taylor