THE European Commission has opened a deeper investigation into Thyssenkrupp’s planned steel joint venture with Tata Steel over concerns that it could raise prices and harm competition.

The so-called Phase II investigation was widely expected and follows a similar probe into ArcelorMittal’s takeover of Italy’s Ilva, which was cleared only after the group pledged to sell assets.

Thyssenkrupp and Tata Steel earlier this year unveiled plans to combine their steel activities in Germany, the Netherlands and Britain to become the continent’s second-largest steelmaker after ArcelorMittal.

“The European Commission is concerned that, following the transaction, customers would face a reduced choice in suppliers, as well as higher prices,” the EU executive said in a statement.

“These customers include various European companies, ranging from major corporations to numerous small and medium-size enterprises,” it added.

The European Commission identified three areas where the combination of both companies’ specialty flat carbon steel and electrical steel products could give them a dominant position: steel for the automotive sector, metallic coated steel for packaging and grain oriented electrical steel.

Tata Steel’s European unit has already put a number of assets on the block, including Cogent, a manufacturer and processor of electrical steels, and it is unclear whether these divestments would satisfy EU concerns.

The European Commission now has 90 working days, until March 19, 2019, to investigate the matter and take a decision.

A Thyssenkrupp spokeswoman said that the firm would continue to work closely with the commission, adding the deepened probe was expected. (SD-Agencies)