Thyssenkrupp's supervisory board signed off on Friday on a planned merger of the company's steelmaking business with India's Tata to create the second-largest steelmaker in Europe.

"It's good news for steel and trailblazing for our future," Thyssenkrupp Steel Europe boss Andreas Goss was quoted as saying by the Westdeutsche Allgemeine Zeitung and Welt am Sonntag newspapers.

Read more: Thyssenkrupp steelworkers back merger with Tata Steel

The two firms will each have a 50 percent share in the new company called Thyssenkrupp Tata Steel, which will be headquartered in the Netherlands and employ 48,000 people at 34 sites worldwide.

"With this merger we're in a better position ― through better access to customers and regions," Goss said.

Executives hope the move, conceived to help both companies weather a global steel glut caused by massive Chinese production, will create up to €500 million in savings ($585 million).

Read more: Thyssenkrupp beats earnings forecast despite net loss

The decision follows two years of negotiations and initially met strong resistance from Germany's powerful steel union IG Metall after Thyssenkrupp announced that it would cut around 2,000 jobs as part of the deal.

The union reversed its position after the company gave workplace assurances and guaranteed it would not close down German plants.

The move still awaits final authorization from competition authorities in Europe and other countries.

amp/sms (dpa, AFP)

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