Tata steel merger 'likely to be rejected'
10 May 2019, 17:09 | Updated: 10 May 2019, 17:13
A planned joint venture between Tata Steel and a German company will not go ahead after it emerged the European Commission did not intend to approve the tie-up.
Tata Steel said it believed the EC does not intend to clear its proposed joint venture with Thyssenkrupp.
The two companies had agreed last June to combine their steel operations in Europe to create a 50:50 joint venture.
Tata said that, based on feedback from the commission, it was "increasingly clear" the EC was not intending to clear the proposed tie-up.
Tata Steel's executive director Koushik Chatterjee, and chief executive T V Narendran were asked what the future was for Tata Steel Europe, and whether its Port Talbot site in South Wales could now close.
Koushik Chatterjee said: "One of the fundamental strategies of going ahead in the deal was to create a more sustainable business. Obviously we will go back to the drawing board and look at more options.
"The business has to perform, the business has to work hard and deliver results.
"In the meantime we will look at other strategic opportunities if they were to emerge and we will have to look at specifically what it entails for Tata Steel, Tata Steel Europe."
T V Narendran added: "I think what we're saying is obviously the plant will keep running.
"We need to make sure we run it well. We didn't have a great year last year in the UK.
"We want to make sure this year we run it well and we run it in a manner that is cash positive.
"We are a bit concerned about energy costs in the UK. In the last 18 months it's gone up quite significantly and that's not helping us.
"But we have plans to keep UK (operation) running as long as they are performing well and is cash positive, and I think the team there is working hard to make it that way."
He said the company's UK operation was not cash positive last year, adding: "But the plan for this year is for it to be cash positive."
Port Talbot is Tata's biggest steel plant in the UK, employing 4,500 workers.
Hans Fischer, chief executive of Tata Steel's European operations said: "Our strategy is to be the leading and most sustainable flat steel company in Europe with a strong focus on delivering value, especially for our customers, our employees and our shareholders.
"This strategy will continue to guide us and I'm confident we will chart a strong path forward for all our stakeholders."
Roy Rickhuss, general secretary of the steelworkers' trade union Community, said: "This is obviously a major development that raises as many questions as answers.
"It's important that there are no kneejerk reactions by Tata Steel in response to this development.
"Now is the time for calm heads and a clear focus on the future of Tata Steel Europe.
"It's vital that the business is kept intact and the right steps are taken to safeguard jobs and continue investment to ensure a sustainable future.
"Sadly, this may mean yet another period of uncertainty for steelworkers and their families.
"Community will continue to hold the company to account and to the commitments that have been made to the workforce."