TKAMY Thyssenkrupp AG (PK)

   By Max Bernhard 
 

Thyssenkrupp AG (TKA.XE) steel workers have agreed to a labor contract, clearing a major obstacle toward the fusion of the conglomerate's European steel business with that of India's Tata Steel Ltd. (500470.BY).

Germany's IG Metall union said Monday that about 92% of workers approved the new labor contract that guarantees employment at all of Thyssenkrupp's German steel sites for nine years.

Thyssenkrupp said it welcomed the approval of the collective agreement.

"The members of IG Metall at the steel sites have decided by a clear majority in favor of the collective agreement and this will give the planned joint venture a strong future," said Oliver Burkhard, chief human resources officer of Thyssenkrupp.

Workers had feared that the merger with the European business of Tata Steel, a Tata Group subsidiary, would lead to plant closures.

However, workers only approved the labor contract, not the merger, said Knut Giesler of IG Metall.

Employee representatives will still have to ratify the deal, which has to be approved by the company's supervisory board, he said.

IG Metall and Thyssenkrupp have both commissioned experts to review the economic viability of the deal.

Thyssenkrupp said it still aims to sign the agreement for the deal in early 2018.

In September, Thyssenkrupp and Tata Steel announced plans to merge their European steel businesses in a new joint venture, in which both partners would hold a 50% stake.

Write to Max Bernhard at Max.Bernhard@dowjones.com; @mxbernhard

(END) Dow Jones Newswires

February 05, 2018 10:57 ET (15:57 GMT)

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