EU Commission extends review deadline for Thyssen, Tata Steel deal
29 April 2019
The European Commission has extended the deadline for reviewing the planned joint venture deal between ThyssenKrupp and Tata Steel by 7 working days until 17 June, its website showed on Friday.
Tata Steel and ThyssenKrupp had proposed to combine their steel European operations, which would form the region’s second-biggest steelmaker.
Tata has proposed to sell its Welsh steel plant to get the merger with German steelmaker ThyssenKrupp approved by the European Commission.
Tata has offered to sell the Trostre plant in Llanelli to satisfy regulatory concerns that the merger could result in reduced competition in the sector.
However, the hiving off of The Trostre plant raises questions about the future of the plant that produce steel packaging such as cans and tins and its 700 workers.
According to reports, both Tata Steel and ThyssenKrupp will have to sell some of their assets to get approval from European agencies as the joint venture company will end up holding more than a specified market share in some of their business areas
Even after one-and-half-year of efforts, the joint venture deal between Tata Steel Europe and German steelmaker Thyssenkrupp AG has not been completed.
Both companies have offered to sell assets in Belgium, Spain and the UK to win antitrust approval. The two companies proposed divesting two automotive steel plants in Spain and Belgium. The companies may sell a UK steel operation, but plan to keep the main Port Talbot mill, according to a Bloomberg report.
A BBC report, meanwhile, said Tata Steel could sell one of its Welsh plants to get approval for the proposed merger. The Trostre steel plant in Llanelli, Carmarthenshire, could be sold to get the approval from European Commission (EC). The plant employs 650 people and produces steel packaging for Tata Steel. The joint venture could have over 50 per cent of the steel packaging market in Europe.
While the steel industry in Europe that has emerged from a crippling crisis in 2015 with the loss of thousands of jobs, still faces challenges of competition, which has now been compounded by the uncertainty associated with the Brexit process.