India’s Tata Steel and German steel manufacturer ThyssenKrupp have agreed the first stage of a deal to merge, it has been confirmed.
The companies signed a memorandum of understanding to combine their European steel operations in a 50-50 venture.
They had been in negotiations since last year when Tata withdrew from a sales process to sell its entire UK operations, including in Port Talbot.
Tata’s £15bn pension scheme had been a major sticking point.
BBC Wales reported the deal was imminent on Tuesday and it was confirmed early on Wednesday.
It follows an agreement with workers and the support of the pensions regulators, which meant Tata had distanced itself to a large extent from its pensions liabilities.
Almost 7,000 people are employed by Tata Steel across Wales, including more than 4,000 in Port Talbot – the largest steel works in the UK.
In April, unions expressed fears a merger would be “high risk” and could lead to job josses.
IG Metall union, which represents metalworkers in Germany, was concerned the joint venture could pave the way for ThyssenKrupp to exit the steel business entirely.