German steel giant Thyssenkrupp (OTC: TKAMY) said that it expects its proposed steel merger with Tata Steel (NSE: TATASTEEL) to be blocked by the European Commission over competition concerns. A plan to split the company into two entities has now been put on ice.
“Thyssenkrupp and Tata Steel expect that the planned joint venture of their European steel activities will not go ahead due to the Commission’s continuing concerns,” the Essen-based company said in a statement.
Nevertheless, the Commission itself declined to comment, according to a report by DW News.
“At this stage all I can say is that our investigation is ongoing and that the provisional deadline for the commission to take its decision is June 17,” said European Commission spokesman Ricardo Cardoso.
Tata Steel’s chief executive T V Narendran told the Press Association that Tata Steel’s plant in Port Talbot would remain open.
“I think what we’re saying is obviously the plant will keep running. We need to make sure we run it well. We didn’t have a great year last year in the UK.”
However, the Tata chief said he was “concerned” about increasing energy costs in the UK.
“In the last 18 months it’s gone up quite significantly and that’s not helping us. But we have plans to keep UK running as long as they are performing well and is cash positive, and I think the team there is working hard to make it that way…We want to make sure this year we run it well and we run it in a manner that is cash positive.”