EU Commission prohibits merger between ThyssenKrupp and Tata Steel

Wednesday, 12 June 2019 15:28:58 (GMT+3)   |   Istanbul
       

The European Commission has prohibited the creation of a joint venture by Tata Steel and ThyssenKrupp under the EU Merger Regulation. The merger would have reduced competition and increased prices for different types of steel. The parties did not offer adequate remedies to address these concerns. The Commission said that the decision 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.

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 Commission also carefully investigated the role of imports from third countries. It found that customers of the relevant products are not able to resort to imports to offset potential price increases caused by the proposed merger. Customers pointed to several reasons for this, including the qualitative requirements for these special steel types, which are higher than for commodity steels, and for meeting short delivery times required for their supply chains.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Without remedies addressing our serious competition concerns, the merger between Tata Steel and ThyssenKrupp would have resulted in higher prices. So we prohibited the merger to avoid serious harm to European industrial customers and consumers".

Both companies are significant producers of metallic coated and laminated steel for packaging applications and of galvanized flat carbon steel for the automotive industry.


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