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Thyssenkrupp expects its joint venture with Tata Steel to fail; stock tanks 7%
ThyssenKrupp and Tata Steel in 2018 unveiled plans to combine their steel activities in Germany, the Netherlands, and Britain to become the continent’s second-largest steelmaker after ArcelorMittal.
Share price of steel major Tata Steel was down 7 percent intraday on Friday after sources told Reuters that ThyssenKrupp is expecting the joint venture with Tata Steel to fail.
ThyssenKrupp and Tata Steel in 2018 unveiled plans to combine their steel activities in Germany, the Netherlands, and Britain to become the continent’s second-largest steelmaker after ArcelorMittal. But the landmark deal has not yet been approved due to concerns about its impact on competition.
EU antitrust regulators are concerned that the deal would lead to less choice and higher prices for steel and was increasingly likely to block it unless the companies offered greater concessions.
ThyssenKrupp said that it still saw scope for agreement with European antitrust regulators on a planned joint venture with Tata Steel despite a Financial Times report that Brussels was likely to block the deal.
A ThyssenKrupp spokesman said: “The Competition Commission has taken the reworked commitments proposed by ThyssenKrupp and Tata Steel as an opportunity to conduct another market test.” “There are still a number of ways to adjust our commitments without compromising the commercial logic of the joint venture.”
The joint venture, announced in June last year, is the biggest shake-up in Europe’s steel industry in more than a decade. To be named ThyssenKrupp Tata Steel, the entity will have around 48,000 workers and about 17 billion euros (USD 19.2 billion) in sales.
At 13:30 hrs Tata Steel was quoting at Rs 485.45, down Rs 33.50, or 6.46 percent. It has touched an intraday high of Rs 526.00 and an intraday low of Rs 479.75
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