Multinational Conglomerate Company Thyssenkrupp has recently disclosed that it is in talks with the European Commission, which has launched a thorough investigation into the deliberate European joint venture with Mumbai-based steel company, Tata Steel.
While speaking at the group’s yearly general meeting, Thyssenkrupp chief executive Guido Kerkhoff told stakeholder that they obviously agree with the viewpoint of European Commissioner for Competition Margrethe Vestager, who said that steel is vital for the economy of Europe.
April 29 has been announced as the final deadline to rule on the transaction. The transaction holds a lot of significance as it would pave way for the Europe’s second-biggest steel manufacturer after ArcelorMittal, however the commission’s decision is expected to demand hurting remedies.
Both the companies ThyssenKrupp and Tata Steel are leading integrated manufacturers of flat carbon steel & electrical steel. They have huge production facilities across the European Economic Area (EEA), primarily in Germany, the UK, and the Netherlands.
In a statement, the European Commission said that they have opened a thorough investigation to evaluate the planned formation of a combined venture by ThyssenKrupp and Tata Steel.
Previously in June, Tata Steel said that they have agreed the terms of a half-half joint venture with ThyssenKrupp to form the second largest steel firm, which will be just lag behind ArcelorMittal.
But both the companies may have to give away their substantial assets to get European Commission’s approval as the projected combined venture would break EU’s tie-up rules and curtail competition.
According to Fact.MR report, electrical steel marketplace continue to witness consolidation of domestic markets, owing to continuing trade disputes. The report opines that after the U.S., the electrical steel market is now witnessing consolidation in Europe. As per the report, the electrical steel market is envisaged to grow at more than 8% CAGR through 2026.
EU commission is worried that the merger could decrease the competition in the supply of wide range of exclusive steels. Vestager said that steel is an important raw material for an array of daily use goods. She mentioned that competitive steel prices are highly valuable for the European economy.
Mohit Loshali, an experienced campaigner, writes about the latest evolutions and trends in the automotive and allied domains. He has helped clients from across the globe with his thought-provoking research and analysis.