West Germany: Melding Steel

Bigness is no longer something for which steelmakers of the war-splintered Ruhr have to apologize. With fierce competition in the steel market, mergers to streamline production are becoming a must for survival. For a year now, 29 German steel producers have been coordinating their sales and investments through four regional cartels regarded as laboratories for eventual mergers. Last week two major steel companies, the legendary August Thyssen-Hütte and the oldest Ruhr steel producer, Hüttenwerk Oberhausen A.G. (HOAG), announced merger plans that would make them the world's fourth largest steel company, after U.S. Steel, the recently nationalized British Steel Corp. and Bethlehem Steel.

To Thyssen's present capacity of 8,500,000 tons of steel HOAG will add another 2,500,000 tons; combined annual sales may amount to $2 billion, moving the new enterprise up to third place among West German corporations, with only Volkswagen and Siemens ahead in sales. The deal, still to be approved by the Commission of the European Communities in Brussels, is to be effected by offering HOAG stockholders a total of $150 million in Thyssen shares and $25 million in cash.

Other mergers are in the air. Hoesch, the eighth largest German steelmaker, took the plunge last year when it absorbed Dortmund-Hörder Hüttenunion. Until recently, Krupp was believed to be considering merging with Thyssen; now Klöckner is said to be a potential Krupp partner. And two more companies, Salzgitter and Ilseder Hütte, are eyeing each other as possible mates.