Tata Steel seals landmark deal with Thyssenkrupp

Thyssenkrupp's supervisory board on Friday gave the green light for a steel joint venture with Tata Steel, paving the way for the European steel sector's biggest shake-up in more than a decade.

The largest deal in Europe's steel industry since the takeover of Arcelor by Mittal in 2006, the 50-50 joint venture - to be named Thyssenkrupp Tata Steel - will have about $17.5 billion in sales.

Based in the Netherlands, it will be the continent's No 2 steelmaker after ArcelorMittal and forms the core of Thyssenkrupp CEO Heinrich Hiesinger's plan to turn the steel-to-submarines conglomerate into a technology company.

"The joint venture with Tata Steel is an important milestone for the transformation of Thyssenkrupp to an industrials and service group and will lead to a significant improvement of the financial figures of Thyssenkrupp, effective with closing," the group said. The deal comes as European steel makers face stiff tariffs of 25 per cent on their exports to the United States, their biggest market, fuelling fears the local market might be forced to absorb more volume as a result.