EU Says No to Tata, thyssenkrupp Deal
In a statement, the European Commission said the combination of thyssenkrupp’s steel division with Tata Steel’s European strip business would have led to higher prices.
“The decision preserves effective competition on European steel markets and the competitiveness of this industry. It will also ensure that key customer industries such as the European automotive industry and the packaging industry continue to enjoy access to key inputs at competitive conditions,” the European Commission said in a statement.
Tata and thyssenkrupp announced in May that they were calling off the deal, saying that they believed the commission likely would not approve the deal without concessions beyond those already on the table. The companies said they were unwilling to make extra concessions because further divestments would undermine the business logic of the deal.
In announcing its decision, the commission indeed said it believed Tata and thyssenkrupp's offer was insufficient.
“In metallic coated and laminated steel products for packaging, the proposed divestment would only have covered a small part of the overlap between the merging companies. This was in particular the case for tinplate, the most important packaging steel type in the European Economic Area,” the commission said.
“In automotive hot-dip galvanized steel products, the proposed divestment did not include adequate finishing assets capable of serving the customers in the geographic areas the merging companies mostly compete in. Moreover, the remedy proposal included no assets for the production of the necessary steel input to manufacture galvanized steel products for the automotive sector,” it said.
You can find the commission’s full statement here.