The General Court of the European Union has upheld the European Commission’s decision in 2019 that the proposed Tata Steel Europe-thyssenkrupp joint venture would be incompatible with the internal market and the European Economic Area.
The rejection of the merger had been anticipated by the two companies, who called off the merger plan in May 2019 (see Kallanish passim).
The proposal related primarily to metallic coated and laminated steel products for packaging and hot-dip galvanised steel products used in the automotive industry.
The Commission considered that the transaction would result in a significant impediment to effective competition, in particular due to horizontal non-coordinated effects resulting from the elimination of an important competitive constraint. As a result, customers would have faced a reduction in the number of suppliers, as well as higher prices.
According to the Commission, the remedies proposed by thyssenkrupp and Tata Steel did not address in a full and lasting manner the competition problems identified. Consequently, thyssenkrupp brought an action before the General Court of the European Union for annulment of the decision.
The court has now rejected all the arguments raised by the steelmaker and upheld the Commission’s decision.
An appeal can be made to the European Court of Justice within two months and ten days of notification of the decision.
Since the 2019 ruling, Tata Steel Europe has undergone a restructuring that involves splitting its Dutch and UK operations into separate business units. Thyssenkrupp had meanwhile planned to spin-off its steel business, but this move was halted in March following the outbreak of war in Ukraine.
Adam Smith Poland