FRANKFURT/DUESSELDORF (Reuters) - Thyssenkrupp and India's Tata Steel are struggling to narrow a widening valuation gap as they seek to adjust debt and asset contributions in a planned merger of their European steel operations, people familiar with the matter said.
Thyssenkrupp's business has performed better than Tata Steel's since an initial deal was struck in September, requiring both parties to adjust what their operations are worth and leading to a valuation gap, four sources said.
As talks reach their final stretch, options now include adjusting the amount of debt both groups will transfer to the venture or Tata Steel making a cash payment to Thyssenkrupp to settle the difference, these people said.
A third option could include changing the 50-50 ownership structure of the planned entity, the sources said, adding this was the least likely scenario.
Thyssenkrupp and Tata Steel both declined to comment.
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(Reporting by Christoph Steitz, Tom Kaeckenhoff, Euan Rocha, Arno Schuetze and Maytaal Angel; Editing by Edward Taylor)