ThyssenKrupp and Tata Steel signed an agreement to combine their steel businesses through a fifty- fifty joint venture and create the second player in Europe behind ArcelorMittal. European assets of India’s Tata Steel’s are valued at up to $1,026t. Is that realistic?
Just like big miners, European steel stocks have experienced a now 3-month correction since they peaked in mid February. More accurately, according to Carax-Alphavalue’s analysts “as a combined group, they offer a 6% upside potential with somewhat more if the downside on ThyssenKrupp could be set aside”. They also add that in markets which are “verging on the expensive”, steel stocks are “good value again”.