The European Commission prohibits the proposed merger between Tata Steel and ThyssenKrupp

The European steel sector is a key industry in the European Economic Area. It has 360,000 employees in more than 500 production locations in 23 EU member states. The European Commission did not approve the creation of a joint venture between the steel producers Tata Steel (Germany) and ThyssenKrupp (India) under the EU Merger Regulation.

This joint venture would have led to a reduction in competition and an increase in prices for different types of steel.

Commissioner Margrethe Vestager, in charge of competition policy, said: „Steel makes a crucial contribution to many of the things we use in our daily lives. Millions of people in Europe work in these sectors. And companies depend on competitive steel prices to sell worldwide. No remedies to answer our serious concerns regarding competition. The merger between Tata Steel and ThyssenKrupp would have led to an increase in prices.

Important decisions in the European steel sector

Therefore, we prohibited the merger to avoid serious damage to consumers and European industrial customers”.

This decision follows an in-depth Commission investigation into this joint venture. ThyssenKrupp is the second largest producer of carbon steel in the countries that belong to the European Economic Area. While Tata Steel is the third largest producer. It also maintains real competition on the European steel markets and the competitiveness of this industry.

During this investigation, the Commission received feedback from a large number of customers active in the packaging and automotive industries. These companies depend on competitive steel prices to offer their products to customers at competitive prices. Many of them were worried that the transaction would lead to an increase in prices.

The Commission concluded that, on the market of metallic coated steels and rolled steel for the packaging industry and on the hot-dip galvanized steel market for the automotive industry, the competitive pressure from the remaining players and imports from third countries would not have been sufficient to ensure an efficient competition.

As a result, following the transaction, customers for these products would face a reduced choice of suppliers. As well as with higher prices. These clients include various European companies, from major corporations to numerous small and medium-sized enterprises (SMEs).

Article source: http://europa.eu/rapid/press-release_IP-19-2948_en.htm