Tata and Thyssenkrupp Steel joint venture to be called off
The plan to combine the steel business of Thyssenkrupp and Tata Steel in Europe have hit the road blocks. The European Commission is unimpressed by the concession offered by the steel makers and is likely to block the deal.
Earlier, Tata Steel had reported that the European Commission is processing a regulatory review of proposal to merge the steel business of Thyssenkrupp and Tata Steel Europe to form a 50:50 joint venture (JV) company, which will become Europe's second-largest steel producer after ArcelorMittal.
Tata Steel and Thyssenkrupp had submitted a remedial package in response to the 'Statement of Objection' issued by the European Commission against the JV. The European antitrust authorities have apprehensions that the JV will result in less choice and higher prices for steel in the automotive and electrical products sector. European Commission is expected to complete the review in June.
On the other hand, Thyssenkrupp is planning to restructure its businesses different and is likely to spin-off its elevators business and list it has a separate entity following an IPO. The deal seems to have fallen apart also due to trade war concerns, Brexit uncertainty and labours issues.
Meanwhile, the Tata Steel has divested its stakes in Al Rimal Mining LLC, Oman from the existing 70 per cent to 51 per cent. The company has agreed to sell stakes to the Oman National Investments Development Company (`TANMIA') as a shareholder in Al Rimal Mining LLC. The total cash considerations received from the deal is Rs. 3.50 crore for 19 per cent stake.
Reacting to this development, the stock of Tata Steel closed at Rs. 487.30 per share, up by Rs. 31.65 or 6.10 per cent on BSE.