Tata Steel's Plan to Sell its Netherlands Operations to SSB faces Rough Patch

Tata Steel Ltd. Plan to sell its Netherlands operations to Swedish steelmaker SSAB AB faced a bottleneck. SSAB’s two large shareholders express reservations about the deal, two people aware of the discussion said.

SSAB has informed Tata Steel about it not being able to close the deal within the six-month internal deadline agreed to in November, as per reported in Mint. The people who cited about the delay on the condition of anonymity added that the deal is not off the table yet. This development was first reported by Dagens Industri last week.

One of the two people cited above said that there are several issues that could potentially stall the deal. This includes concerns around higher carbon footprint for the Swedish steelmaker, which will come with the acquisition. The person further added that this is something a section of SSAB’s shareholders is not comfortable with as things stand.

The Swedish business daily reported that two of SSAB’s largest shareholders, LKAB and Industriavarden, were skeptical about the deal. Dagens further reported that these two investors together own 20.9 percent of SSAB.

Another roadblock on Tata Steel’s and SSAB’s deal is securing regulatory clearances from the European Commission, which is highly concerned to prevent price cartelization. Looking at the fact that the potential merger between SSAB and Thyssenkrupp too hit a roadblock due to similar reasons.