European Steel Merger Succumbs to Antitrust Decision -- WSJ
June 12 2019 - 2:02AM
Dow Jones News
By Valentina Pop
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 12, 2019).
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
combination would reduce competition in the supply of special steel
for the car and packaging industries.
"We prohibited the merger to avoid serious harm to European
industrial customers and consumers," said competition commissioner
Margrethe Vestager, adding that the two companies failed to propose
sufficient remedies to address the EU's concerns.
Thyssenkrupp is currently Europe's second-largest producer of
high-value steel, followed by Tata. Combined, they would have still
ranked behind ArcelorMittal SA.
The antitrust decision, which was expected, marks another defeat
for executives and politicians who have been promoting the
formation of more European business giants to counter competition
from the U.S. and China. It follows on the heels of a failed bid by
Italy's Fiat Chrysler Automobiles NV to merge with French car maker
Renault SA.
Ms. Vestager dismissed criticism that the European Commission
has been a deterrent to European companies gaining scale to compete
globally. She said that over the past 10 years the antitrust body
has blocked only 10 mergers, while approving 3,000. She also noted
that ArcelorMittal was allowed to buy Italy's Ilva, Europe's
largest steel plant, after the parties to the deal offered
concessions that allayed the commission's concerns.
Tata Steel said last month that the merger with Thyssenkrupp,
announced in 2017, was off the table because the remedies demanded
by the EC went beyond the "logic" of the deal.
In February, Ms. Vestager's office stopped plans to merge the
train-making operations of Germany's Siemens AG with France's
Alstom SA, a deal they said was necessary to be able to compete in
the future with China's CRRC Corp., the world's largest rail
supplier. The commission said the Franco-German merger would have
harmed competition in the markets for high-speed trains and
signaling systems.
As Europe's steel sector reels from U.S. tariffs imposed last
year, Ms. Vestager said the decision to block the Tata-Thyssenkrupp
merger will keep production sites open and allow European car
makers and the packaging industry to source steel at competitive
prices on the continent.
Anticipating the deal's rejection, Thyssenkrupp had abandoned a
plan to split itself into two companies. Instead, the German
company said it would pursue an initial public offering of its
elevator business and explore partnerships for 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 12, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
ArcelorMittal (EU:MT)
Historical Stock Chart
From Apr 2024 to May 2024
ArcelorMittal (EU:MT)
Historical Stock Chart
From May 2023 to May 2024