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EU Prohibits Proposed ThyssenKrupp & Tata Steel JV

Steel News - Published on Wed, 12 Jun 2019

Image Source: Moneycontrol
The EU Commission has decided to prohibit the proposed joint venture between steelmakers Tata Steel and ThyssenKrupp, saying it would have reduced competition and increased prices. Competition Commissioner Ms Margrethe Vestager said “The EU blocked the merger under the EU Merger Regulation to avoid 'serious harm to European industrial customers and consumers. Steel is a crucial input for many things we use in our everyday life, such as canned food and cars. Millions of people in Europe work in these sectors and companies depend on competitive steel prices to sell on a global level. Without remedies addressing our serious competition concerns, the merger between Tata Steel and ThyssenKrupp would have resulted in higher prices. Its decision preserves effective competition on European steel markets and the competitiveness of this industry. It will also ensure that key customer industries such as the European automotive industry and the packaging industry continue to enjoy access to key inputs at competitive conditions.”

The Commission's decision follows an in depth investigation of the proposed joint venture, which would have combined the flat carbon steel and electrical steel activities of ThyssenKrupp and Tata Steel in the European Economic Area.

During the investigation, the Commission received feedback from a large number of customers active in the packaging and automotive industries. These companies depend on competitive steel prices to offer their products to customers at competitive prices and many were worried that the transaction would result in higher prices. The merging companies offered remedies, but these did not adequately address competition concerns

ThyssenKrupp is the second largest producer of flat carbon steel in the EEA while Tata Steel is the third largest. Both companies are significant producers of metallic coated and laminated steel for packaging applications and of galvanised flat carbon steel for the automotive industry.

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Posted By : Ratan Singh on Wed, 12 Jun 2019
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