Tata Steel, thyssenkrupp Abandons Steel Joint Venture in Europe

SEATTLE (Scrap Monster): The proposed steel joint venture between Tata Steel and thyssenkrupp in Europe is unlikely to get clearance by the European Commission (EC). According to the Commission, the intended merger of the steel majors will require substantial remedies in the form of sale of assets in order to uphold competitive steel market conditions in the region. It must be noted that the two companies had signed a definitive agreement in June last year towards creation of a 50-50 joint venture company.

Earlier, the EC had published a Statement of Objections, highlighting several areas of concerns. Both the companies have been working hard to offer a comprehensive package of remedies covering all areas of concerns raised by the Commission. However, based on the market test carried out by the Commission, it noted that it is unlikely to clear the joint venture project, in spite of the remedies offered by both the companies.

Tata Steel and thyssenkrupp observed that they are unable to offer any further remedies, as any enhancement to the offered package would severely impact the economic viability and fundamental sustainability of the joint venture. Further, they expressed deep disappointment over the Commission rejecting nod for the proposed JV.

Commenting on the outcome, Tata Steel noted that the company remains committed to its strategy of creation of a sustainable portfolio in Europe and de-consolidating of its European business. The company would explore all possible options to achieve similar outcomes in the future.