By Valentina Pop 

BRUSSELS -- The European Union's antitrust enforcer on Tuesday blocked the planned merger of the European steel businesses of India's Tata Steel Ltd. and Germany's Thyssenkrupp AG, saying the resulting company would have reduced competition in the supply of special steel for the car and packaging industries.

Competition commissioner Margrethe Vestager said the two companies failed to propose sufficient remedies to address the EU's concerns. "We prohibited the merger to avoid serious harm to European industrial customers and consumers," Ms. Vestager said. The planned merger, announced in 2017, would have created Europe's second-largest steel producer after ArcelorMittal SA.

The blocked merger marks another defeat for executives and politicians who have been pushing for the formation of more European giants to counter competition from the U.S. and China.

Ms. Vestager dismissed criticism about her blocking the merger of European companies able to compete globally. She said that over the past 10 years, only ten mergers were blocked, while 3,000 were approved. The commission last year allowed ArcelorMittal to buy Italy's Ilva, Europe's largest steel plant, after the companies offered sufficient concessions to allay the commission's concerns, she said.

In February, the European Commission, the antitrust body, stopped plans to merge the train-making operations of Germany's Siemens AG with France's Alstom SA, a deal the companies said was necessary to be able to competition in the future with Chinese rail giant CRRC Corp., the world's largest rail supplier. The European Commission said the Franco-German merger would have harmed competition in the markets for high-speed trains and signaling systems.

The expected negative decision by the commission to create a second European steel giant was one of the main reasons that forced Thyssenkrupp to abandon a plan to split itself into two companies. Instead, the German company said it would pursue an initial public offering of its elevators business and be open for partnerships of its industrial operations.

Ruth Bender in Berlin contributed to this article.

Write to Valentina Pop at


(END) Dow Jones Newswires

June 11, 2019 08:16 ET (12:16 GMT)

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