KOLKATA: The executive board and the supervisory board of Germany’s Thyssenkrupp AG have adopted resolutions that paves the way for signing of a definitive agreement to create a 50/50 joint venture, that will combine the European steel businesses of Thyssenkrupp and Tata Steel. The decision follows the signing of a Memorandum of Understanding between the two in September 2017. In a statement issued late night on Friday, Thyssenkrupp said due diligence and independent expert opinions have confirmed the economic viability of the new company and the expected annual recurring synergies of €400 to 500 million. “The joint venture with Tata Steel is an important milestone for the transformation of Thyssenkrupp to an industrials and service group and will lead to a significant improvement of the financial figures of Thyssenkrupp, effective with closing,” the statement said. However, in case of an Initial Public Offering (IPO) of the joint venture Thyssenkrupp will receive a higher share of the proceeds, reflecting an economic ratio of 55:45, it added.The signing of the definitive agreement is expected shortly. The transaction is subject to merger control clearance in several jurisdictions, including the European Union.The deal initially faced opposition from Thyssenkrupp workers union which questioned the move. Workers representatives on the board and having a significant say in the companys affairs. The final hurdle was crossed after the powerful unions gave their nod to the proposed agreement. Earlier this month, in the run up to the final agreement between the two partners, investment management firms like, Elliot Management Corp raised the issue of valuation adding that in recent months the European steel business of Tata Steel did not perform as well as Thyssenkrupp and hence questioned whether it should get equal stake in the propsed JV.Thyssenkrupp’s second-largest shareholder Cevian Capital also had similar views on the joint venture with Tata. This is believed to have prompted the two prospective partners to get back to the table and thrash out a compromise that would include a compensation for Thyssenkrupp.