EU Blocks Merger of European Steel Units of Tata, Thyssenkrupp -- 2nd Update
11 Juni 2019 - 02:31PM
Dow Jones News
By Valentina Pop
BRUSSELS -- The European Union's antitrust enforcer on Tuesday
blocked the planned merger of the European steel businesses of
India's Tata Steel Ltd. and Germany's Thyssenkrupp AG, saying the
resulting company would have reduced competition in the supply of
special steel for the car and packaging industries.
Competition commissioner Margrethe Vestager said the two
companies failed to propose sufficient remedies to address the EU's
concerns. "We prohibited the merger to avoid serious harm to
European industrial customers and consumers," Ms. Vestager said.
The planned merger, announced in 2017, would have created Europe's
second-largest steel producer after ArcelorMittal SA.
The blocked merger marks another defeat for executives and
politicians who have been pushing for the formation of more
European giants to counter competition from the U.S. and China.
Ms. Vestager dismissed criticism about her blocking the merger
of European companies able to compete globally. She said that over
the past 10 years, only ten mergers were blocked, while 3,000 were
approved. The commission last year allowed ArcelorMittal to buy
Italy's Ilva, Europe's largest steel plant, after the companies
offered sufficient concessions to allay the commission's concerns,
she said.
In February, the European Commission, the antitrust body,
stopped plans to merge the train-making operations of Germany's
Siemens AG with France's Alstom SA, a deal the companies said was
necessary to be able to competition in the future with Chinese rail
giant CRRC Corp., the world's largest rail supplier. The European
Commission said the Franco-German merger would have harmed
competition in the markets for high-speed trains and signaling
systems.
The expected negative decision by the commission to create a
second European steel giant was one of the main reasons that forced
Thyssenkrupp to abandon a plan to split itself into two companies.
Instead, the German company said it would pursue an initial public
offering of its elevators business and be open for partnerships of
its industrial operations.
Ruth Bender in Berlin contributed to this article.
Write to Valentina Pop at valentina.pop@wsj.com
(END) Dow Jones Newswires
June 11, 2019 08:16 ET (12:16 GMT)
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