Krupp Foundation: We supported Thyssenkrupp's Tata JV plans

Krupp Foundation: We supported Thyssenkrupp's Tata JV plans

Should the deal have gone ahead, it would make Tata-Thyssenkrupp Europe's second largest steel company - the largest being ArcelorMittal. The company also said it would abandon a plan to split itself into two companies that would hold shares in each other.

Meanwhile, Tata Steel shares tumbled 6.10 per cent to close at Rs 487.30 on the BSE, while it dropped 6.20 per cent to close at Rs 486.95 on the NSE, according to a PTI report.

The merger of the steel divisions of Thyssenkrupp and the Indian rivals Tata and the associated splitting of the group is cancelled. The transaction was subject to merger control clearance in several jurisdictions, including the European Union.

The European Commission had extended the deadline for reviewing the planned joint venture deal between ThyssenKrupp and Tata Steel by seven working days until June 17.

Tata has committed to keeping the giant Port Talbot steel plant open after signalling its planned joint venture with German rival Thyssenkrupp was off.

"The economic downturn and its effects on business development and the current capital market environment have led to the separation not being able to be realised as planned", Thyssenkrupp said.

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Tata's said in a separate statement that both "partners assume with deep disappointment that the European Commission will not approve the joint venture".

Tata Steel termed the proposed JV as an important strategic initiative for the company to create a sustainable portfolio in Europe, and now it being thrown off-track, it said it would explore all options to achieve similar outcomes in the future.

The Tata Steel management said it would continue with the de-consolidation of balance sheet and deleverage of debt, despite the setback. "Compared to a Dollars 1-billion target, we done much more, in fact double that in the last six months at the gross level and we will focus on internal generation and also look at more asset sales", he said.

The Alfried Krupp von Bohlen and Halbach Stiftung, Thyssenkrupp's largest shareholder with a 21 percent stake, said it would assess the proposals, adding it wanted to safeguard jobs and a sustainable ability to pay dividends. "Sadly, this may mean yet another period of uncertainty for steelworkers and their families", he added. Asked whether the Tatas would continue to operate the Port Talbot plant in Wales that suffered a fire episode recently, the management said it expected the operations to become cash positive in order to remain sustainable.

The Essen-based company said further concessions would have weakened the venture to such an extent that it would have no longer made business sense.

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