British Steel has been active in Europe. In the USA many steel companies have filed for bankruptcy. In Asia, Nippon Steel and Posco have taken a stake in each other and Nippon Steel is also investing in China. The rationales behind the mergers or alliances have been cost cutting, product mix rationalization, better control on markets, access to certain markets, access to technology and control on prices. While consolidation in theory is a sound idea, the proposal of merger in the Indian steel sector seems scatterbrained.
Lets look at the rationales as given above.
First of all the British Steel is an example where the companies being merged into it were much smaller in size. The companies under consideration in India are not small by Indian standards. I do not know what kind of freedom British Steel had as a government owned company for cost cutting etc, but in recent times it has been able to shed workforce and closed down unremunerative product lines. Out of the four companies mentioned above, three are of similar size and from large groups. Unless there is a sell-out by some of the groups, the mergers is unlikely to yield any results whatsoever.