Tata Steel Group said the proposed merger of its European operations with Thyssenkrupp of Germany has hit a road block after the European Commission has raised many objections to the deal. Tata Steel Europe and Thyssenkrupp had signed definitive agreements on June 30, 2018 to create a 50:50 pan-European joint venture. “The European Commission discussed the proposed joint venture with both Thyssenkrupp and Tata Steel Europe.
Based on the feedback received from the Commission, it is increasingly clear that the Commission is not intending to clear the proposed JV as it expects substantial remedies in the form of sale of assets of the proposed venture,” Tata Steel said in a statement.
The steel major further said based on the statement of objections published by the Commission, a comprehensive package of remedies was offered covering all the areas of concern highlighted by the Commission. The remedies offered were aimed at developing the overall industrial strategy for the proposed JV, the integrated and complex nature of the supply chain to service customers and the need to build a sustainable business which would be able to endure the structural challenges faced by the European steel industry.
“The feedback from the Commission based on the market test it has undertaken suggests that it is unlikely to clear the proposal in spite of the significant remedies offered,” Tata Steel said. It further said further commitments or improvements to the remedy package would adversely affect the basic foundation of the proposed JV.