Engineering news
Tata Sons board decision to replace Cyrus Mistry with interim chairman Ratan N. Tata has raised uncertainty over whether its efforts to combine its European steel operations with Thyssenkrupp will continue.
The Indian conglomerate Tata Sons owns Tata Steel, Jaguar Land Rover, as well as a range of other brands in the UK. In March 2016, Mistry had expressed an intent to divest of the company’s unprofitable business in the UK, including Tata Steel. However, reports from India said that the board did not fully back these plans.
Tata Steel has been in talks to merge its European business, including its UK sites such as Port Talbot steelworks, with Thyssenkrupp. The joint venture is dependent on whether the company’s pensions scheme canbe restructured and whether financial support will be made available from government.
However, analysts Mahesh Nandurkar, Abhinav Sinha and Alok Srivastava recently wrote in a report for CLSA, provider of investment banking in Asia, Latin America and Europe, that “it was widely believed that Cyrus Mistry was the driver of Tata Steel’s strategy to sell-off its European assets.”
This has caused speculation that his departure could slow down or halt the progress of the joint venture. Thyssenkrupp declined to comment on the changes or about the ongoing merger discussions.
Interim chairman Ratan N. Tata, 78, the great grandson of Tata’s founder, released a statement to assure the company and shareholders it was business as usual and asked the leadership of the companies to focus on their respective businesses, without being concerned about the change in leadership.
Referring to ongoing initiatives in the companies, he said, “We will evaluate and continue to undertake those that are required to. If there is any change, they will be discussed with you.”
Tata stressed that he had assumed the role of the interim chairman for stability and continuity so that there is no vacuum. “This will be for a short time. A new permanent leadership will be in place,” he said.
Tata Sons has announced that a Selection Committee has been constituted to choose a new chairman, and will complete its mandate in four months.