The JV deal between ThyssenKrupp and Tata Steel would have set a milestone in European business. Had it been placed, it would’ve been the biggest steel deal in Europe since 2006. This was when Arcelor was acquired by Lakshmi Mittal. The 50:50 JV deal has now left all hopes to set its foot in Europe.
Tata Steel and Germany’s ThyssenKrupp lose their hopes in setting up a joint venture in Europe. The European Commission denied Tata Steel’s JV on Friday. The 50:50 Joint venture deal was signed between the two in June 2018. Had it been cleared, this deal would’ve been the greatest steel deal since 2006. Then, Arcelor was acquired by the Indian entrepreneur, “Steel King” Lakshmi Mittal.
The deal was aimed at creating a “sustainable” steel enterprise.
Gains for Tata Steel out of the proposed
Had the deal been sealed, the steel company would have shifted €2.5 billion into the joint venture company. That amount represents 30-40% of European debt in its business. At the end of the last fiscal year, its debt stood at ₹1 lakh crores. This had lowered down by ₹18,000 crores in the past 6 months.
Tata has, however, set its foot in the Indian market for decades. Recently, Tata has seen potential in many startups that may get a good prize out of the bet it places on them. The latest came in as Ratan Tata sat on board with Ola Electric.
In the proposed deal, the two parties had agreed to combine their steel business on European soil as 50:50 joint venture. This would’ve led to the formation of a new game changer in the European steel market. It would have had a combined turnover of €17 billion/annum. It would have also helped the EU with increasing employment, by getting 48,000 employees in the starting phase of the JV.