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Steel News August 23, 2019 02:30:08 PM

Thyssenkrupp Challenges EC's Denial of its Merger with Tata Steel

Paul Ploumis
ScrapMonster Author
The merger transaction was initially notified to the EC in September last year.
Thyssenkrupp Challenges EC's Denial of its Merger with Tata Steel

SEATTLE (Scrap Monster): German multinational conglomerate Thyssenkrupp has filed a complaint before the General Court of the European Union (EGC) against the decision by the European Commission (EC) to block its merger with the Indian steel giant Tata Steel.

In a statement issued yesterday, Thyssenkrupp noted that the commitments submitted by it and Tata Steel were sufficient enough to remove competition concerns. The company has decided to file a complaint as it regrets the EC decision and consider it as too far-reaching and wrong. The Commission set out a restrictive market definition that unduly extends the scope of the existing competition law, it said.

The EC did not take adequate account of the structural importance of imports into Europe, said Donatus Kaufmann, member of the Executive Board of Thyssenkrupp AG. Further, he pointed out that overcapacities and high import pressure from Asia create an environment in which the planned joint venture with Tata Steel would not have impaired competition.

The merger transaction was initially notified to the EC in September last year. An initial market investigation had raised several preliminary competition concerns. Following this, the Commission had carried out a detailed investigation, considering inputs from customers belonging to various sectors, including packaging and automotive industries. Further to findings of the investigation, the deal was vetoed by the antitrust body in June this year, stating that a possible merger between the two companies would reduce competition and increase prices for different types of steel.