SMM News: on the morning of May 10, local time, according to the Frankfurt report, Margaret Vestager, antitrust commissioner of the European Commission, officially rejected the merger plan between ThyssenKrupp and India's Tata Steel.
ThyssenKrupp has abandoned plans to merge its European steel business with Tata Steel, as well as plans to split the group into industrial and materials companies, according to stock market news from stock analysis website Yingwei.
ThyssenKrupp and Tata Steel, which ranks second and third in the European steel industry, signed a memorandum of understanding on the establishment of a joint venture on September 20, 2017. On July 2, 2018, ThyssenKrupp and Tata Steel formally signed an agreement to merge the European steel business.
According to the plan, the joint venture, called ThyssenKrupp Tata Steel, has a 50-50 stake in (Thyssenkrupp Tata Steel), and 48000 employees, with an estimated annual turnover of 17 billion euros and an annual output of 21 million tons of steel. ArcelorMittal, the largest steelmaker in Europe and the world, is second only to ArcelorMittal.
Under EU law, all business mergers within the EU are subject to the approval of the European Commission's antitrust commissioner. In late October 2018, the European Commission began an in-depth investigation into the merger and was concerned that the deal could reduce competition in Europe's high-end steel supply. The European Commission said at the time that if the deal went through, consumers would face fewer supplier choices and higher prices.
Especially in the automotive steel, packaging steel (packaging steel) and crude steel three areas, the combined ThyssenKrupp tower will occupy an absolute market monopoly position. In response, the European Commission asked the two companies to come up with compromises to ensure free market competition in these areas.
In response, ThyssenKrupp had previously submitted materials to the European Commission on April 1, agreeing to sell Galmed, a Spanish subsidiary responsible for the production of steel plates for cars. ThyssenKrupp bought about 75 per cent of Galmed from ArcelorMittal in 2003. Tata also promised to spin off its packaging steel operations in Belgium and the UK, but ThyssenKrupp and the European Commission have been unable to reach an agreement on crude steel production.
In addition, Tata's plan to sell packaging steel has been boycotted by the workers' Congress. Frits van Wieringen, a staff representative, told a number of media in early April that Tata had made far more concessions than ThyssenKrupp and would have a significant negative impact on jobs.
The stalemate in the negotiations has also led to repeated delays in the approval deadline previously set by the European Commission.
In December, the European Commission suspended the trial of the case, waiting for the two companies to submit documents and information. These documents should have been submitted when the European Commission was informed of the merger in September 2017. On January 15 this year, the European Commission reopened its investigation into the deal and set a deadline for April 29. But on April 26th the EU again postponed the deadline to June 17th.
Vestager, who has lost patience with the merger, issued an ultimatum to the two companies on May 6, demanding specific concessions from the two steel giants, according to the Financial Times and German Economic Weekly. ThyssenKrupp shares closed down 4.5% (11.72 euros / share) on the Frankfurt Stock Exchange, the lowest in seven years.
On February 6, Vestager, known as the "sworn enemy of Silicon Valley", also vetoed the merger of Siemens rail transit business and Alston in France, sparking strong dissatisfaction between the German and French governments.