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Thyssenkrupp objects to Tata Steel JV rejection; Klöckner talks continue

thyssenkrupp AG filed a complaint with the General Court of the European Union against the European Commission's decision to block a European flat steel joint venture with Tata Steel Ltd.

The EU's executive arm said in June that the merger would have resulted in higher prices as it would restrict competition in Europe in certain steel grades.

The German conglomerate said Aug. 22 that it does not share the concerns, adding that the commitments submitted by the two companies would have been sufficient to remove competition concerns.

"The commission did not take adequate account of the structural importance of imports into Europe, buyer-side purchasing power and possible substitutions with alternative packaging materials and alternative galvanizing methods," thyssenkrupp said.

Thyssenkrupp's executive board member Donatus Kaufmann added that the joint venture would not have impaired competition due to overcapacities and high import pressure from Asia.

The commission previously noted that the proposed asset divestments related to the products did not include production assets, and imports would not be enough to address the issues.

Meanwhile, thyssenkrupp's talks with metals trader Klöckner & Co SE are continuing, but a takeover is not in the works, Reuters reported Aug. 22, citing German newspaper Handelsblatt.

The company approached Klöckner for a possible takeover in June, looking to boost its materials trading business thyssenkrupp Materials Services GmbH unit.

According to one of three people familiar with the matter, a complete takeover of Kloeckner was unlikely, adding that a deal could take place via a swap, with Kloeckner taking a minority stake in the combined business.

The two companies are reportedly discussing a range of issues, including consolidation.