BERLIN, Sept. 20 (Xinhua) -- After more than a year of negotiations, the German industrial group Thyssenkrupp on Wednesday agreed on the merger of its European steel division with its Indian competitor Tata. However, Thyssenkrupp's works council has announced its plans to enact strong resistance against the merger.
The final agreement is to be signed in 2018, Thyssenkrupp announced Wednesday at its headquarters in Essen. The companies will cut 2,000 jobs each and save up to 600 million euros (720 million U.S. dollars).
The new company will be based in the Netherlands. Thyssenkrupp and Tata intend to hold 50 percent of the shares each. After the merger, the company will employ approximately 48,000 workers, of which 27,000 come from Thyssenkrupp.
The merger still has to be approved by the supervisory board of the German company.
The works council and the metalworker's union IG Metall resisted the plan against the backdrop of the potential threat of massive cuts in locations and employees.
The employee representatives have called for protests on Friday with 5,000 steel workers expected to attend. In addition, employee representatives announced they would unanimously vote against a merger with the Indian competitor in the event of a vote in the supervisory board. Such a voting would be a novelty in the company's history.
Thyssenkrupp steel division's works council criticized the merger plans.
"The board has put all eggs in one basket against all warnings. This does not mean that we approve," the head of the works council of the steel division Guenter Back told dpa on Wednesday, adding that a merger would in the end result in "significantly more" jobs to cut.
Thyssenkrupp Group CEO Heinrich Hiesinger emphasized the need for further consolidation in the past in light of global overcapacity. Even without such a merger, cuts in staff and locations would be necessary, he had argued.
