Tata Steel (TATA) has signed a definitive agreement with ThyssenKrupp (TK) to spin off its European steel assets into a 50:50 joint venture (JV). This clears the uncertainty around valuations. The entity will be called ThyssenKrupp Tata Steel BV (TKTS). The terms of the agreement might be a little different from the MoU signed in September 2017. TKTS will be managed by a two-tier board structure (management and supervisory) with equal representation. TATA will move EUR2.5b of debt and TK will move EUR4b of unfunded pension liabilities into TKTS as decided earlier. However, TK will now have higher economic interest of 55% in case the JV decides for an IPO. The additional 10% economic interest will be monetized by TK in the IPO so that the commitment to maintain equal holding for six years is not breached