Tata Steel and German firm Thyssenkrupp have agreed a merger deal.
The flat steel businesses of the two companies in Europe and the steel mill services of the Thyssenkrupp group will merge in the proposed 50:50 joint venture.
The German-based company’s executive board approved the plans on Friday after signing a memorandum of understanding last September.
Both firms employ a total of 48,000 workers, with Tata owning UK plants including Port Talbot in South Wales, which employs 4,000 people. Almost 7,000 are employed by the company in the country in total.
When the memorandum was signed, Hans Fisher, chief executive of Tata Steel Europe, said there would be potential job losses of 2,000 split between the two companies, with those initially in sales and marketing.
A statement from Thyssenkrupp said: “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.”
Once the deal is complete, the Indian owned Tata’s plants will be merged into a pan-European venture. Yearly sales are expected to be around £13bn.