The proposed merger between Thyssenkrupp and its Indian competitor Tata may not happen because the European Commission (EC) is likely to block it, the German steel giant said on Friday.
The two companies fear the merger could reduce the planned synergy effects and they do not want to make concessions to get the deal through.
The Essen-based Thyssenkrupp was initially viewing the planned merger as an advantage to its corporate restructuring plan since it would have created Europe’s second-largest steel group employing about 48,000 people at production plants in Germany, Britain and the Netherlands.
Over the past few months, the EC has been examining whether the merger would affect competition regarding steel among carmakers.
The commission’s spokesman Ricardo Cardoso said on Friday he cannot make any comment at this stage because it is still examining the pros and cons of the proposed merger and a decision will be taken with a week.
Later in the day, Thyssenkrupp announced it would shed some 6,000 jobs, most of them in Germany.
While reviewing the strategic plans, the company’s executive board wanted to consider a leaner holding structure and floating its elevator business on the stock market.
If the Thyssenkrupp-Tata merger does not get EC’s approval, the German firm’s plan to split it in to Thyssenkrupp Industrials and Thyssenkrupp Materials will be delayed.