History
In 1966 the board of Koninklijke Hoogovens voted in favour of merging their IJmuiden steelworks with the Dortmund plant of German steelmaker Hoesch; Hoesch would benefit from the IJmuiden steelwork's port, and Koninklijke Hoogovens' 43% shareholding in the Dortmund-Hörder Hüttenunion (DHHU) was converted into a 15% shareholding in Hoesch with Hoesch acquiring DHUU. The two firms made agreements on division of work between the plants – IJmuiden was to concentrate on pig iron, crude steel, and semi-manufactured products, whilst Hoesch's Dortmund plant was to produce finished steels and manufactured products. The two entities were merged in 1972, forming Estel NV, headquarter in Nijmegen.
In the mid 1970s the Steel crisis caused overcapacity in steel production throughout Europe; Estel needed to invest to improve production quality and efficiency to compensate for loss of production volume, and to cut production costs; additionally Hoesch's branch of Estel was making losses, and required support; as such it sought investment from both the German and Netherlands government; however the Dutch government was only willing to invest if the German state also supported the venture, whilst the German state wished any restructuring and investment to be done in collaboration with Krupp (also loss making) which was not acceptable to Dutch banks. As a result in 1982 the 50:50 partnership of Estel was dissolved, with Hoesch taking 61% of its liabilities.
Read more about this topic: Estel
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