The ThyssenKrupp-Tata Steel merger could fall under merger control regulation, according to the European Commission’s initial findings, S&P Global Platts reported quoting the commission’s Official Journal. The two companies officially notified the commission on the merger last week.
The comments by the commission dated October 3, 2018 ask third parties to send remarks in the next ten days, the report added.
“On preliminary examination, the commission finds that the notified transaction could fall within the scope of the merger regulation,” the commission said, adding that a definite decision has not been made yet, the report pointed out. The commission set a preliminary decision deadline for October 30 and will then decide whether to grant approval or initiate an in-depth investigation.
The investigation is expected to examine how the deal which will create a 50:50 joint venture with 17 billion Euro in revenues and 48,000 employees, could cut competition and may require sale of assets in areas where the two companies have significant overlap.
The deal is being considered a milestone in consolidation of Europe’s steel sector that is struggling in the face of overcapacity, cheap imports, and, more recently US tariffs on metal imports. The ThyssenKrupp-Tata combine would control an estimated 27% of the European flat steel market, behind ArcelorMittal with 38%.
The planned joint venture would make the new company the second-largest steel producer in Europe behind ArcelorMittal, producing an annual output of 21 million tonne.
Source: Economic Times