NEW DELHI: Tata Steel Wednesday said it will continue discussions with the European Union (EU) on the proposed joint venture with ThyssenKrupp.
The statement comes a day after the EU launched an in-depth investigation to assess if Tata Steel's proposed joint venture (JV) with German steel giant ThyssenKrupp would breach the bloc's merger regulations and reduce competition.
The European Commission Tuesday launched an in-depth investigation to assess the proposed creation of a joint venture by Tata Steel and ThyssenKrupp.
"Tata Steel to continue discussions with the European Commission on proposed joint venture with Thyssenkrupp," Tata Steel said in a statement issued Wednesday.
In June, Tata Steel had confirmed that it has agreed to the terms of a 50-50 joint venture with ThyssenKrupp to create Europe's second-largest steel company after Lakshmi Mittal's ArcelorMittal.
"The proposed joint venture is subject to merger control clearance in several jurisdictions, including the European Union, and until the completion of the JV process, ThyssenKrupp Steel Europe and Tata Steel in Europe will operate as separate companies and as competitors," Tata Steel said.
Over the last few months, Tata Steel said it along with ThyssenKrupp has engaged in parallel with the European Commission (EC) to provide information in relation to the businesses, which would be part of this joint venture.
Following pre-notification engagement with the EC, both parties notified the proposed joint venture to the EC on 25th September.
"On October 30 (Tuesday), in line with the expected timelines of the merger review process, the EC announced that it will undertake a Phase II review of the merger proposal and will investigate certain areas of preliminary competition concern.
"Tata Steel has noted the EC's concerns and will continue its discussions with the EC, including providing further information and analysis, especially in relation to sectors they have identified, to secure approval for the proposed joint venture," the statement said.
At this stage, the commission said it is concerned that the merger between the two steel majors may reduce competition in the supply of various high-end steels.
"Steel is a crucial input for many of the goods we use in our everyday life, and competitive steel prices are vital for the European economy.
"Industries dependent on steel employ over 30 million people in Europe and we must be able to compete in global markets.
This is why we will carefully investigate the impact of the planned combination of Tata Steel's and ThyssenKrupp's steel businesses on effective competition in the steel markets," Margrethe Vestager, Commissioner in charge of the EU's competition policy has said.