Thyssenkrupp will not be rushed into any deal with Tata Steel to merge their European steel businesses, its chief financial officer said, pouring cold water on investor hopes for a quick agreement.
The German steel-to-elevators group is facing pressure from investors to deliver on the tie-up, after talks have been going on for over a year.
They have been held up mainly by the question of who will assume responsibility for Tata Steel’s legacy £15 billion pound pension scheme in Britain.
Britain’s Sky News reported on Wednesday that Tata Steel was on the brink of detaching its British Steel pension fund from its UK operations, a precondition for any merger deal with Thyssenkrupp.
“Just because you might read at some point that Tata has a deal, it doesn’t mean we can stand up a week later and say: ‘Now we have a joint venture’. It cannot work that way,” Thyssenkrupp CFO Guido Kerkhoff told journalists yesterday.
“We also prefer a fast solution but quality comes before time,” he said, declining to say whether the group aimed for a deal before its fiscal year ends next month.
Shares in the group were up 0.2 per cent, one of only five gainers in Germany’s blue-chip index after it posted better-than-expected third-quarter results, boosted by a recent recovery of steel prices.
Third-quarter order intake rose 14 per cent to €10.7 billion and adjusted earnings before interest and tax (EBIT) jumped 41 per cent to €620 million. Analysts had, on average, expected an order intake of €10.3 billion and adjusted EBIT of €493 million.
Quarterly operating profit at Steel Europe – the business that would merge with Tata – more than doubled to €232 million, well above the poll average of €187 million. At Industrial Solutions, it fell sharply to €6 million, below the €18 million average poll.