The European Union’s antitrust authority on Tuesday blocked the merger of German industrial conglomerate Thyssenkrupp with Tata Steel, AFP reported. “We prohibited the merger to avoid serious harm to European industrial customers and consumers,” EU Competition Commissioner Margrethe Vestager said in a statement.
The merger would have created the second largest steel company in Europe after ArcelorMittal. However, in May, the two companies abandoned the merger, expecting the European Union to prohibit it. This came after Thyssenkrupp announced it would have to cut 6,000 jobs as a result of the merger, mainly in Germany.
The commission said on Tuesday that the merger would have “reduced competition and increased prices for different types of steel”. “Proposed solutions did not offer adequate remedies to address these concerns,” it added.
“Steel is a crucial input for many things we use in our everyday life, such as canned food and cars,” Vestager said, according to Reuters. “Millions of people in Europe work in these sectors and companies depend on competitive steel prices to sell on a global level.” She said that imports from third countries would not have been able to offset the increase in steel prices.
Tata Steel and Thyssenkrupp had inked the deal in June last year. In September 2017, the two companies had signed a preliminary deal to merge their European steel operations. The firms said the agreement would help them address challenges in the volatile steel industry, including overcapacity. The new entity would have been named Thyssenkrupp Tata Steel.
However, Thyssenkrupp, which posted a net loss of €86 million (Rs 67.55 crore) last month, said on Tuesday that it is now aiming for a stock market listing of its elevators business, as part of a massive restructuring plan.
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!