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Thyssenkrupp employees will not support Tata JV at any price

Reuters  |  DUESSELDORF, Germany 

By Tom Käckenhoff

DUESSELDORF, (Reuters) - Labour leaders, who hold half the seats on Thyssenkrupp's supervisory board, will not support a planned joint venture with if concessions in ongoing antitrust proceedings go too far, a said.

and are planning to combine their European activities to create the continent's No. 2 steelmaker after ArcelorMittal, raising concerns that far-reaching remedies are required to secure antitrust approval.

The is expected to outline its competitive concerns about the merger this week, calling on the two firms to offer compromises to avert a potential veto.

"We won't support a merger at any price," Markus Grolms, of Thyssenkrupp's supervisory board and at IG Metall, Germany's biggest labour union, told on Wednesday.

"We have always defined a red line with regard to the merger control proceedings. If this line is crossed we won't give our support," Grolms said, without saying where the line would be drawn.

Shares in the group traded 3.2 percent lower at 1124 GMT, dropping to a fresh three-year low.

Several brokerages cut their price targets following weak first-quarter results on Tuesday.

Grolms said Thyssenkrupp's supervisory board, where labour representatives hold 10 of the 20 seats, would have to vote on the outcome of remedy negotiations between the company and the Commission.

They could be outvoted by Martina Merz, who has a casting vote in case of a draw, but this would be unprecedented and would go against Thyssenkrupp's long-standing tradition of making large restructuring moves with labour support.

a day earlier said the Commission's statement of objections, expected at the end of the week, was not unusual given the transaction's size. He said it gave no reason for fresh concerns.

The group is still confident it can complete the deal in early 2019. The will rule on the transaction by April 29.

"We've always been straight about this and have already confronted (former Heinrich) Hiesinger with our concern that the risks from merger control proceedings are either underestimated or deliberately downplayed by management," Grolms said.

The steel joint venture is a key part of Thyssenkrupp's transformation plan, which also includes a of its elevator, and plant engineering units to form a separately listed entity.

(Writing by Christoph Steitz; Editing by and Edmund Blair)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, February 13 2019. 17:11 IST
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