Sept. 20 (UPI) -- India's Tata Steel and Germany's ThyssenKrupp have signed a memorandum of understanding to merge their European operations on Wednesday, a statement from the Indian company said.
The statement from Tata Steel notes that the venture would be focused on quality and technology leadership and supplying premium and differentiated products to their customers, with an estimated annual revenue of around $18 billion. The headquarters will be in Amsterdam with more than 48,000 employees.
"The strategic logic of the proposed joint venture in Europe is based on very strong fundamentals," said N Chandrasekaran, chairman of Tata Steel., "I am confident that ThyssenKrupp Tata Steel will have a great future."
However, about 4,000 layoffs are expected due to too much production capacity and not enough demand.
ThyssenKrupp CEO Heinrich Hiesinger said, "Even with the joint venture it will not be possible to avoid job cuts."
The next step will be to negotiate definitive detailed agreements between the companies and anticipate to close the deal by 2018.
Tata Steel is among the top steel companies in the world and is the world's second-most geographically diversified steel producer, with operations in 26 countries and a commercial presence in 50 countries.