Tata Steel in Talks for Possible European Joint Venture

LONDON—Tata Steel Ltd. is in talks with Germany's Thyssenkrupp AG and other steel industry firms as part of the company's plan to find a better alternative for its European businesses, the company said Friday.

The Mumbai-based company, which is one of Europe's largest steelmakers by production capacity, said it initiated discussions with other strategic players in the industry, such as engineering conglomerate Thyssenkrupp, to explore the feasibility of strategic collaborations through a potential joint venture.

The potential tie-up "offers the best prospects to create a premium, world-class strip steel business with the scale and scope of capabilities to compete successfully on the global stage," said Koushik Chatterjee, Tata Steel's Executive Director for Europe.

In April, Tata Steel formally announced that it wanted to sell its U.K. operations, citing severe funding problems, a global glut of steel and high manufacturing costs. The company said seven expressions of interest for the unit were advanced to the next stage of a possible sale process.

Tata Steel said the bids were reviewed in the light of the uncertainties caused by the U.K. referendum and the outcome of the U.K. Government's consultation on the British Steel Pension Scheme.

Mr. Chatterjee said the success of the joint-venture talks, if the U.K. operations were included, would depend on "finding a suitable outcome for the British Steel Pension Scheme, successful discussions with the U.K. trade unions and the delivery of policy initiatives and other support from the Governments of the U.K. and Wales," among other issues.

Write to Alex MacDonald at alex.macdonald@wsj.com and Razak Musah Baba at Razak.Baba@wsj.com

(END) Dow Jones Newswires

July 08, 2016 14:55 ET (18:55 GMT)

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