European Union blocks Tata Steel-Thyssenkrupp merger
12 Jun 2019
The European Union's powerful anti-trust authority on Tuesday blocked the merger of Tata Steel’s European operations with German industrial conglomerate Thyssenkrupp with a veto that killed the deal.
The merger would have created the second largest European steel company behind multinational giant ArcelorMittal and strengthened European steel industry in the face of a surge in imports from China.
"We prohibited the merger to avoid serious harm to European industrial customers and consumers," EU competition commissioner Margrethe Vestager said in a statement.
The companies have already abandoned the merger on expectations that the EU would reject the deal. The companies have ruled out any more concessions to Brussels in order to get green light for merger.
Thyssenkrupp has also announced it would slash 6,000 jobs as a result, mainly in Germany.
The commission, the EU's executive arm, criticised the merger, which "would have reduced competition and increased prices for different types of steel," a statement said.
Proposed solutions "did not offer adequate remedies to address these concerns," it said.
Thyssenkrupp said it was now aiming for a stock market listing of its elevators business as part of a massive restructuring. The company last month reported a net loss of 86 million euros ($96 million).
In contrast, ThyssenKrupp has early last year reported a 250-million-euro profit, reflecting the difficult context for global steel companies.
European steel industry has been hit by a wave of problems, including overcapacity, cheap Asian imports and punishing US tariffs.