European Commission blocks Tata Steel's JV with thyssenkrupp

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26 Aug, 2025 12:21

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The European Commission has blocked the proposed joint venture between Tata Steel and Germany's thyssenkrupp, dealing a serious blow to the Indian steelmaker's plans to stabilise its operations in Europe.

The JV, which was signed last year, would have merged the European operations of the two companies, making it the second biggest in the continent, after ArcelroMittal.

Tata Steel's European operations - including units in the UK and Netherlands - had come under its fold after the acquisition of Corus in 2007. The operations, especially the UK units, had been hit by high costs and accentuated by a soft market in Europe that never recovered fully after the financial slowdown of 2008.

The JV, an equal partnership between the two, was expected to turnaround the operations. But it was not to be.

The Commission was probing the JV, checking if the venture will hurt competition in some of the key segments of the steel sector in Europe. The commission had identified three industry segments - automotive steel, coated steel used for packaging and electrical steel - where the JV may harm competition.

"Feedback from the Commission based on the market test it has undertaken suggests that it is unlikely to clear the proposal in spite of the significant remedies offered... Consequently, the partners assume with deep disappointment that the European Commission will not approve the joint venture," Tata Steel said in a statement on Friday.

Tata Steel and thyssenkrupp are believed to have offered to sell plants in Spain, Belgium and the UK. The UK facilities could include units that make electrical steel and packing steel.

The two partners had submitted a proposal that includes “concessions” and the commission was expected to come to a decision by June 17. But with further remedies coming from the two partners, the Commission gave its feedback much before the deadline.

"In the view of thyssenkrupp and Tata Steel, further commitments or improvements to the remedy package would adversely affect the basic foundation of the proposed joint venture and the intended synergies arising from the merger to such an extent that the economic logic of the joint venture would no longer be valid... Hence both partners are unable to offer any further remedies to the Commission to meet its requirements," Tata Steel said.

The JV would have had annual revenues of 17 billion euros and produce 21 million tons of steel a year.

Way forward

The proposed joint venture was an important strategic initiative for Tata Steel. It would have helped the company de-consolidate the European business and de-leverage its balance sheet.

"There are a  few options to explore," said TV Narendran, Tata Steel CEO & MD, while addressing a media call just after the announcement.

While he declined to elaborate, Narendran said the focus will be to keep the operations sustainable. He reiterated that the European operations needed to be cash positive, which they weren't last year.

But the company expects the European operations to perform better, with a five percent increase in volumes. "Last year, the operations were hampered because of a shutdown in the blast furnace," said Narendran.

Executive director and CFO Koushik Chatterjee added that the company is disappointed that the JV didn't happen, but is keeping all the options open.

Statement from thyssenkrupp 

With the expected unsuccessful outcome of the steel joint venture, the Executive Board of thyssenkrupp AG has reassessed the strategic options for the company and will propose to the supervisory board to not go ahead with the planned separation into two independent companies.

The economic downturn and its effects on business development and the current capital market environment have led to the separation not being able to be realized as planned.