It’s a move where the intention is to remain competitive, but it could cost 4,000 workers their jobs in the process. The Associated Press reports on Sept. 20, 2017 that Thyssenkrupp in Germany and Tata Steel of India have signed on to merge the operations both have running in Europe. The tentative deal would thus launch the continent’s second-largest steel company, according to the Associated Press, which adds that one of the driving factors behind the consolidation is to be able to compete with cheaper steel that has been coming out of China. What’s more, the report cites plenty of figures that could be realized as a result of the merger. For example, the merged operation that would be based out of the Netherlands would rake in $18 billion annually, employ some 48,000 workers and ship 21 million tons of steel annually.
Todd Katz, formerly of Quest Integrity, says that this is an interesting development for many reasons. First, such fiscal figures are often held close to the vest until at least the ink on the agreement has dried. Todd Katz’s ability to comment on the possible merger stems from the fact that while with Quest Integrity, he was a hands-on chief financial officer. He played an active role as the international pipeline inspection company grew from a mere 55 employees to a total of 285 in 2016 and earned $75 million in revenue that same year. Since Todd Katz was both the strategic CFO and a global hands-on controller, he became well aware of the quirks of the international pipeline inspection market. Given Mr. Katz’s extensive experience as both a global CFO and before that a decade of experience in global M&A, he is well qualified to discuss the issues surrounding large-scale M&A like Thyssenkrupp and Tata Steel.
Remaining on the global stage, Todd Katz worked to lead Quest Integrity’s implementation of a worldwide enterprise resource planning system that handled nine currencies across 11 countries. He also oversaw the global implementation of a customer relations management system and oversaw external and internal financial audits. While the Thyssenkrupp/Tata Steel deal likely won’t close until 2018, some government officials wasted no time sounding off on the news. According to the Associated Press, Germany’s labor minister felt that Thyssenkrupp’s properties in that country “must be maintained and compulsory layoffs ruled out.” Todd Katz, who is no stranger to weighing the risks of international M&A, will watch the outcome of this possible business merger closely.