Title: Thyssenkrupp challenges EC's decision to stop JV with Tata Steel
The Commission found that the remedies offered by the two prospective partners were insufficient.
KOLKATA: Thyssenkrupp of Germany has said it has filed a complaint with the General Court of the European Union (EGC) against the European Commission's decision to prohibit its joint venture in Europe with Tata Steel
The Commission had justified its merger control decision of June 11, 2019 by stating that a joint venture between Thyssenkrupp and Tata Steel would restrict competition in Europe in certain steel grades to such an extent that it would lead to price increases for consumers. The Commission found that the remedies offered by the two prospective partners were insufficient. On Thursday, Thyssenkrupp said in an official statement that it "does not share these concerns."
The German industrial conglomerate said in its competitive assessment of the product groups of packaging steel and hot-dip galvanized steel for the automotive industry, the Commission has for the first time set out "a restrictive market definition that unduly extends the scope of the existing competition law." More specifically, the Commission did not take adequate account of the structural importance of imports into Europe, buyer-side purchasing power and possible substitutions with alternative packaging materials and alternative galvanizing methods, the statement added.
Thyssenkrupp also said it feels the the commitments submitted by it and Tata Steel, consisting of production facilities, long-term supply contracts and significant investments, would have been sufficient to remove competition concerns.
Donatus Kaufmann, member of the Executive Board of Thyssenkrupp AG said : "We regret the European Commission's decision and regard it as too far-reaching and wrong. That is why we are filing a complaint." The consolidation of the European steel industry is still right and necessary which is also shown by the current critical market situation for steel manufacturers, he added. "Overcapacities and high import pressure from Asia create an environment in which the planned joint venture with Tata Steel would not have impaired competition," he pointed out.