Dec. 15 (Bloomberg) -- Corus Group Ltd., the U.K. unit of India’s Tata Steel Ltd., said separate newspaper reports that it may merge with its parent and move operations to China unless carbon emissions rules are overhauled are “false.”

These stories are “completely false,” Corus spokesman Bob Jones, based in London, said today in an e-mailed response to questions.

Tata, India’s biggest steelmaker, may combine with London- based Corus as the British company attempts to save 350 million pounds ($524 million) in costs, the Daily Mail said today on its Web site without saying where it obtained the information.

Corus Chief Executive Officer Philippe Varin threatened to move the company’s European operations to China unless regulations on carbon emissions are overhauled, The Independent on Sunday reported yesterday, citing comments from Varin.

Corus, which operates plants in the U.K. and Netherlands, said Dec. 11 that “all options” are open as it holds talks with labor unions, including the possibility of cutting pay, as the company seeks to slash costs because of weakening demand. Corus said in October it may extend a 20 percent output cut into the first quarter.

Steelmakers across the world are cutting jobs and production as slowing economies erode demand for the metal from carmakers and builders. ArcelorMittal, the world’s biggest steelmaker, said Nov. 27 that it may slash as many as 9,000 jobs, or 3 percent of its global workforce, as part of its bid to lower costs.

To contact the reporter on this story: Mark Herlihy in London at mherlihy1@bloomberg.net. Jean Chua in London at jchua4@bloomberg.net

Last Updated: December 15, 2008 05:36 EST