UPDATE 1-Thyssenkrupp defends joint venture deal with Tata as shares fall

* Thyssenkrupp shares down 1 pct, Tata Steel down 1.3 pct

* Thyssenkrupp CEO says deal is fair

* Some investors, analysts say deal is disappointing (Recasts, adds investor comment, context)

FRANKFURT/DUESSELDORF, July 2 (Reuters) - Thyssenkrupp on Monday defended updated terms of a landmark joint venture deal with Tata Steel that was announced over the weekend and drew criticism from some shareholders and analysts.

Following two years of talks and an initial agreement in September 2017, both companies on Saturday signed the transaction that will create Europe's No.2 steelmaker and marks the sector's biggest consolidation in more than a decade.

Final terms include a clause that will give Thyssenkrupp higher proceeds in a potential listing of the 50-50 venture, paying tribute to demands by activist shareholders Elliott and Cevian, who had pushed management to seek better terms.

In case of a listing, Thyssenkrupp and Tata Steel will share proceeds in a 55-45 ratio, which Thyssenkrupp Chief Executive Heinrich Hiesinger said was a "fair representation" to close a valuation gap in the medium triple-digit million euros.

"Our supervisory board ... including their advisors came to the same conclusion. And we stick to their judgement," Hiesinger told journalists at a joint news conference in Brussels.

Thyssenkrupp shares traded 1 percent lower, while Tata Steel's lost 1.3 percent, with Jefferies analyst Seth Rosen and Union Investment fund manager Ingo Speich both saying that the final outcome was disappointing. (Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Tom Sims)