On Saturday, Tata Steel sealed its business agreement with Germany's ThyssenKrupp AG to bind their European businesses into a 50:50 joint venture. The newly formed firm, proposed to be named ThyssenKrupp Tata Steel BV, will reportedly be positioned as a leading high-quality steel producer in pan-Europe.
Following the news, shares of Tata Steel climbed up by 2.87 percent at 9:23 am on BSE (Bombay Stock Exchange) on Monday morning-the early opening minutes of the stock markets after the news broke out.
The European arm of Tata Steel was long due to sign the deal with German ThyssenKrupp AG. The deal has proven to be especially beneficial to Indian steel maker as the agreement will allow the company to offload its euro 2.5 billion (Rs 20,000 crore) debt to its new joint venture, and ThyssenKrupp would transfer euro 4 billion debt of its own.
Tata Steel recently acquired Bhushan Steel for Rs 35,200 crore and also made it as one of the two final bidders for Bhushan Power and Steel after it bid Rs 17,000 crore (as per various news reports).
The joint venture deal is subject to merger control clearance from various jurisdictions, which includes European Union. Until then, the two will operate as separate entities.