Europe’s second-largest flat steel business is to be formed through the 50:50 merger of Mumbai-based Tata Steel´s Dutch and British operations with those of German steel major ThyssenKrupp.

The two companies have signed a memorandom of understanding after nearly a year of negotiations, the companies said in a statement issued on Wednesday. The combine’s ‘lean headquarters operations’ will be located in Amsterdam.

The new combine, which will have a global workforce of 48,000 expects to cut 4,000 jobs in Europe, 2,000 in production and 2,000 in administration. The job cuts will be split evenly between the two companies.

Tata Steel Nederland employs 11,000 people, of whom 9,000 are based in IJmuiden. It is unclear how many Dutch jobs will go, but the FNV trade union expects the bulk of the Tata Steel jobs will go in the Netherlands. ‘The British operation has already been slimmed down, so most will go in IJmuiden,’ FNV official Aad in ‘t Veld told NOS.

The statement said the proposed joint venture -Thyssenkrupp Tata Steel – would be focused on quality and technology leadership, and the supply of premium and differentiated products to customers, with annual shipments of about 21 million tonnes of flat steel products.

The new entity will rival Europe’s top producer, ArcelorMittal. The joint venture would have annual turnover of about €15bn and the deal is expected to be finalised in 2018.

The new company includes the former Hoogovens plant in IJmuiden which was merged with British Steel to create Corus in 1999. At its formation, Corus was the largest steel maker in Europe and the third-largest in the world. Tata acquired the Anglo-Dutch steel maker in 2007.

The Tata Steel central works council said on Wednesday afternoon it had been shocked by the news. ‘The job losses aside, we really can’t imagine merging with a company that says openly it sees no future in steel,’ chairman Frits van Wieringen told broadcaster NOS. ‘Without the works council approval, there will be no merger.’