Steelmakers ThyssenKrupp and Tata Steel expect the European Commission to block the proposed merger of their European steel assets, after remedies the companies suggested earlier this year did not assuage the commission’s concerns.
Thyssen and Tata submitted a package of commitments on 3 April, following an investigation into the venture in response to concerns about reduced competition in the specialty flat steel market. The commission said it would make a provisional decision by 17 June.
“Further commitments or improvements would adversely affect the intended synergies of the merger to such an extent that the economic logic of the joint venture would no longer be valid,” ThyssenKrupp said, adding that its executive board will now propose to the supervisory board that the planned separation of ThyssenKrupp Steel Europe from the company’s other operations should not go ahead.
ThyssenKrupp said “the economic downturn and its effects on business development and the current capital market environment” mean the separation cannot be realised as planned. The company expects to reintegrate steel assets in the third quarter of the current fiscal year.
ThyssenKrupp will instead push for an initial public offering of its elevator manufacturing business.
Over two years of talks were held about the joint venture with Tata, and the companies signed a definitive merger agreement on 30 June 2018.
Tata reportedly agreed to sell a galv line in Belgium, as well as part of its packaging business in south Wales, while ThyssenKrupp offered to divest a Spanish galv line.