(Bloomberg) -- Thyssenkrupp AG (DE:TKAG) and Tata Steel Ltd. (NS:TISC) submitted concessions to European Union regulators in an effort to win antitrust approval for their steel joint venture.
The European Commission didn’t provide any details on what they pledged to do, but typically companies offer to sell overlapping units to allay concerns that the merged firm would have too much power to increase prices or curb supplies.
The companies are prepared to sell part of car body sheet production, including Thyssenkrupp’s Spanish unit Galmed, Handelsblatt reported, citing anonymous sources. The newspaper said the proposal had packaging steel assets including plants in Belgium and the U.K. They also offered to give customers access to raw steel production.
Asset sales outside of Germany would satisfy demands by Thyssenkrupp’s labor leaders that the joint venture won’t cause job losses in Germany. Union representatives at the company control half of all votes on the company’s supervisory board and would fiercely oppose concessions that cut German steelworkers.
The EU usually sends the proposal to rivals and customers for feedback. The European Commission extended its deadline to June 5 to make a decision, a spokesman said.
The plan to create a European steel company jointly owned by Germany’s Thyssenkrupp and India’s Tata “raised several issues,” the EU said last year when it opened an in-depth probe into the transaction. These were related to the supply of galvanized steel for cars and car parts, metallic-coated steel for food and aerosol cans and steel used for transformers and other engineering products.
Only four European companies currently provide steel to the auto industry: ArcelorMittal, Thyssen, Tata and Voestalpine AG.
The merged entity, under the proposed name of Thyssenkrupp Tata Steel B.V., would focus on high-quality flat steel production.
(Updates with new deadline and Handleslblatt reporting.)
