European Commission prohibits Tata Steel and Thyssenkrupp JV
TATA Steel is a subsidiary of TATA Group and is one of the top steel producing companies globally having its headquarters in Mumbai, Maharashtra. Thyssenkyupp AG, is a German multinational conglomerate based in Duisburg and Essen has around 670 subsidiaries worldwide and focuses on industrial engineering and steel production.
In the European Economic Area (EEA), TATA Steel is the third largest producer of flat carbon steel after Thyssenkyupp AG. Considering this factor, the European Commission had doubts about the effects of the proposed joint venture on price competitiveness. This joint venture could have resulted in a higher price for products as the two large producers would come together and make a new entity resulting in a market leader. Mainly, the hot dip galvanised steel product market would be affected as the venture would have had eliminated an important competitor. Both the companies had proposed solutions and remedies for EC’s concerns but the changes asked by the EC over them were not economical for the companies. This brought disappointment Tata Steel as the proposed joint venture couldn’t go through.
The stock of TATA Steel closed at Rs. 505.60 which is an increase of 2.60 per cent or Rs. 12.80 more than its previous closing price.