Monday, June 7, 1999 Published at 16:14 GMT 17:14 UK
Business: The Company File
British Steel merges with Dutch rival
British Steel has announced that it will merge with its Dutch rival Koninklijke Hoogovens, creating the world's third largest steel producer.
The new group plans to make £194m savings per year, expecting "terrific cost savings in overhead costs, purchase, logistics and adjusted best practices".
British Steel has already confirmed that some jobs will go in administration, but has declined to specify how many people will be axed.
The newly merged company will provisionally be called BSKH and will be Europe's biggest steel company. British Steel will represent 61.7% and Hoogovens 38.3% of the new group.
BSKH will have 70,000 employees, 50,000 from British Steel.
British Steel is currently in the process of cutting some 10,000 jobs on the shop floor, but most analysts believe that likely job losses will come on management level, to weed out duplicated positions.
British Steel is to meet unions on Tuesday to discuss the merger.
Union officials are especially concerned about the future of plants in Port Talbot and Llanwern in South Wales, and Shotton in North East Wales.
Mr Leahy said the Dutch firm had been going through its own productivity programme and together with British Steel was competitive enough to "take on the world".
"Speculation that a UK plant could be closed is just ill-informed speculation," he added.
"We will discuss with British Steel how that can be avoided and we will also be contacting trade unions in Holland to talk about the possibility of forming a partnership."
Share price boost
During early trading on Monday, the company's shares shot up another 8.1% or 13.25 pence to 175 pence.
However, later in the day the stocks traded down again, losing 11.5 pence or 7.1% on Friday's close.
Traders said investors may be switching some holdings out of British Steel into Hoogovens to benefit from of an expected premium in Hoogovens' share price.
British Steel has recently been badly hit by the strength of the pound. Industry analysts welcomed the deal as a way of it getting a wider foothold in the European market.
In global terms there are only two steel producers that are bigger: Posco of South Korea and Japan's Nippon Steel.
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