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Steel News June 12, 2019 08:30:11 AM

European Commission Blocks Tata Steel-thyssenkrupp AG Merger

Paul Ploumis
ScrapMonster Author
The merger transaction was initially notified to the Commission on 25th September, 2018.
European Commission Blocks Tata Steel-thyssenkrupp AG Merger

SEATTLE (Scrap Monster): The European Commission announced its decision to prohibit the proposed merger between Tata Steel Ltd. and thyssenkrupp AG. The press release issued by the Commission noted that the parties failed to offer adequate remedies to concerns raised by it. The Commission had pointed out that the merger would result in reduced competition and increased process for different types of steel products.

The merger transaction was initially notified to the Commission on 25th September, 2018. Following an initial market investigation, the Commission had raised several preliminary competition concerns. It had warned that customers are likely to face reduced choice in suppliers, as well as higher prices.

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In order to confirm the preliminary concerns, the Commission carried out an in-depth investigation, by considering feedbacks from a large number of customers belonging to packaging and automotive industries. The Commission also investigated the role of imports from third countries. The final decision to prohibit the merger comes upon conclusion of the detailed investigation.

Commissioner Margrethe Vestager, in charge of competition policy noted that the remedies proposed by the merging companies to the serious competition concerns were not adequate. The prohibition of the merger is to avoid serious harm to European industrial customers and consumers, she said. The decision preserves effective competition on European steel markets, she added.