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Thyssenkrupp, Tata lose fight against EU veto of joint venture
Global Banking & Finance Review®
Company
By Foo Yun Chee
BRUSSELS (Reuters) -Thyssenkrupp and Tata Steel have lost their fight against a European Union antitrust veto of their proposed landmark joint venture, after Europe’s second-highest court rejected their arguments.
The two companies in 2019 had sought to tackle over-capacity and other challenges in the steel industry via the joint venture, which would have created Europe’s second-largest steelmaker after ArcelorMittal.
But the European Commission said the deal could result in significant price hikes and demanded remedies Thyssenkrupp at the time said would jeopardise the logic of the planned transaction.
The EU competition enforcer in its 2019 decision said the companies had not offered sufficient steps to address concerns, forcing it to block the deal and the companies to challenge the finding at the Luxembourg-based General Court.
“In today’s judgment, the General Court rejects all the arguments raised by the undertaking and upholds the Commission’s decision,” the Court said on Wednesday.
The parties can appeal on matters of law to the Court of Justice of the European Union, Europe’s top court.
The case is T-584/19.
Thyssenkrupp, which has since explored and rejected an attempt to sell its steel division to Britain’s Liberty Steel, said it had taken note of the decision.
“We remain of the opinion that the EU Commission’s blocking of the joint venture with Tata Steel Europe in 2019 was a disproportionate step,” the company said.
Tata Steel Europe declined to comment.
(Reporting by Foo Yun Chee; Additional reporting by Tom Kaeckenhoff in Duesseldorf and Christoph Steitz in Frankfurt; Editing by Edmund Blair and Jane Merriman)
Antitrust refers to laws and regulations that promote competition and prevent monopolies in the marketplace, ensuring fair business practices and protecting consumers.
A joint venture is a business arrangement where two or more parties agree to collaborate on a specific project while maintaining their separate identities.
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the EU's day-to-day operations.
Overcapacity in the steel industry occurs when the production capacity exceeds the demand for steel, leading to lower prices and financial losses for producers.
A competition enforcer is an authority or agency that ensures compliance with competition laws, preventing anti-competitive practices and promoting fair market competition.
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