Unions of the German company, and those in the Dutch and UK operations of Tata Steel Europe have their own set of conditions for the merger to go ahead.
Can collective benefits triumph over self interests?
Answer to the question lies at the heart of Tata Steel Europe's merger with Thyssenkrupp's European steel business.
Labour unions of Thyssenkrupp, Tata Steel's Dutch and UK operations have voiced their individual concerns about the merger conditions.
The labour representatives at the German company aired concerns after earnings of Tata Steel Europe dropped even as Thyssenkrupp's numbers grew. Would the differing performances mean that the German operations will have to support the UK business, which has suffered due to cheap imports?
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At Tata Steel, the workers in the UK facilities are concerned if the merger will lead to shut down of any facilities, eventually leading to job losses. The doubts have persisted despite Tata Steel promising limited job losses, after the merger.
The Dutch facilities have managed to ensure an exclusive provision within the merger. Tata Steel has guaranteed that the Dutch operations would have control over their profits and effectively continue as an independent company.
This hasn't gone well with the counterparts at Thyssenkrupp. German labour union representatives have indicated that they could demand the same. “But then a joint venture no longer makes sense because every unit would only act on its own,” Reuters quoted a union secretary.
"The British, the Dutch and the Germans have their self interests that are larger than the collective benefits. This (the merger) is like a steep hill," a senior executive from the industry with considerable experience of working in Europe, told Moneycontrol.
The merger
Tata Steel Europe and Thyssenkrupp had signed the merger agreement in September, agreeing to create an operation that will be second only to ArcelorMittal in Europe.
The formalities were expected to be completed by June, but have been delayed by six months.
The two companies had agreed to an equal joint venture, which will also hold debts of Tata Steel and Thyssenkrupp.
The two sides have emphasised the benefits of the merger, which would lead to 400 million euros of synergy gains. But the sticky point would be the reduction of 4,000 jobs.
But with Tata Steel Europe's performance not matching up to its partner's, Thyssenkrupp's shareholders have called for a renegotiation of terms, especially the equity shareholding. Some have even asked for a compensation from Tata Steel.