Indian steelmaker Tata Steel and German multinational conglomerate ThyssenKrupp on Saturday signed a landmark steel joint venture agreement, Reuters reported. The deal makes the 50-50 joint venture entity the second-largest steelmaker in Europe after ArcelorMittal.

In September 2017, the two companies had signed a preliminary deal to merge their European steel operations. The firms said the agreement would held them address challenges in the volatile steel industry, including overcapacity. Thyssenkrupp said it bagged the right to choose when to make a listing.

The Netherlands-based venture, which will be named Thyssenkrupp Tata Steel, will employ around 48,000 people and have a revenue of 17 billion euros (approximately Rs 1.36 lakh crore).

Tata Steel Chairperson Natarajan Chandrasekaran said it was a significant milestone for the company, BBC reported. “We remain fully committed to the long-term interest of the joint venture company,” Chandrasekaran said. “We are confident that this company will create value for all stakeholders.”

In 2016, Tata Steel had indicated that it wanted to sell its assets in the United Kingdom, but changed its plans later.

The joint venture is part of Thyssenkrupp Chief Executive Officer Heinrich Hiesinger’s goal to transform the steel-to-submarines conglomerate into a technology company. “It is the only solution to create significant additional value of around 5 billion euros for both Thyssenkrupp and Tata Steel due to joint synergies which cannot be realized in a stand-alone scenario,” Hiesinger said.

The agreement follows the United States’ decision to impose a 25% tax on steel on its allies in Europe.