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Steel merger will not go ahead, say Tata and Thyssenkrupp

Credit: PA

Tata Steel and German steelmaker Thyssenkrupp have both announced that they think their proposed merger is doomed.

Indian-owned Tata runs Port Talbot, Llanwern and Shotton steelworks and the tinplate works at Trostre near Llanelli.

The Port Talbot steel works in action from above.

Thyssenkrupp said it expected the plan to turn its steel business into a joint venture with Tata will fail.

The two companies had been trying to get European Union approval. It was feared that concerns about the new venture's size and market dominance would result in a requirement to sell off the Trostre works, where 650 people work.

Thyssenkrupp headquarters in Essen, Germany. Credit: PA

The Welsh Government has said it has received assurances about the future of the Troste site. It says it has been told Troste would be sold as a operating, profit making site with a viable future.

Steel unions are worried, however, that the Llanelli plant would no longer be a guaranteed customer for Port Talbot steelworks if the two sites no longer belong to the same company.

There has been months of speculation about the proposed deal.

In a statement, Tata Steel said talks with the European Commission had led both companies to conclude "with deep disappointment" that the merger will not be approved.

The European Commission discussed the proposed joint venture with both Thyssenkrupp and Tata Steel. Based on the feedback received from the Commission, it is increasingly clear that the Commission is not intending to clear the proposed joint venture as it expects substantial remedies in the form of sale of assets of the proposed venture. A comprehensive package of remedies was offered covering all the areas of concern highlighted by the Commission, however, the feedback from the Commission based on the market test it has undertaken suggests that it is unlikely to clear the proposal in spite of the significant remedies offered.

– Tata Steel Statement

Tata said it remains committed to hiving off its European business and will "explore all options" in future.

The steel works in Port Talbot is the largest in the UK. Credit: PA

The steelworkers' trade union Community has called on the company to keep the business intact and called for no "knee-jerk" actions.

This is obviously a major development that raises as many questions as answers. It’s important that there are no knee-jerk 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.

– Roy Rickhuss, General Secretary, Community

Unite the union is calling on the Tata board to give steel workers assurances and end what it calls the "rollercoaster of uncertainty".

Tata Steel’s workforce has been on a rollercoaster of uncertainty for several years. When we meet the Tata board we will be telling it that it is a ride that has to end and demanding assurances over jobs and investment. Tata Steel’s workforce has made great sacrifices to secure a future for the steelmaker. It would be a betrayal if their livelihoods were now put at risk because of this doomed joint venture.

– Tony Brady, Unite National Officer for Steel

In political reaction, representatives of Aberavon have spoken to Tata to arrange an "urgent meeting to discuss the future of steel making in Wales".

  • Stephen Kinnock MP for Aberavon speaking to ITV News

Member of Parliament for Aberavon, Stephen Kinnock, said "assurances" were needed:

"It is vital that we gain the assurances the local community need from Tata Steel that planned investments in the Port Talbot works will still go ahead, in order to secure the long-term sustainable future of our steel industry".

He added that the company "must urgently make good on their commitments and investment plans, so that the jobs and livelihoods of our steelworkers and their families can be safeguarded".

Assembly Member for Aberavon, David Rees, described today's events as "a cloud over the future of steelmaking in Port Talbot".

  • David Rees AM for Aberavon speaking to ITV News

Elsewhere Plaid Cymru's Bethan Sayed, AM for South Wales West, said her party had "consistently warned that proposed merger was not a sustainable and secure basis upon which to plan and protect the Welsh steel industry".

She called for an "alternative strategy" to be developed.

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