Proposed acquisition of Alstom by Siemens

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Author (Corporate)
Publication Date 2017-
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Reports and analysis of the merger announcement between France's manufacturer of high-speed trains Alstom and Germany's rail manufacturing Siemens, including the antitrust investigation conducted by the European Commision to the potential effects of the proposed transaction.

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The French state-controlled Alstom - the manufacturer of French high-speed trains - announced on 26 September 2017 a merger with the rail manufacturing part of the German owned Siemens. Siemens and Alstom signed a Memorandum of Understanding through which a new company - under the name of Siemens Alstom - would combine Siemens’ mobility business including its rail traction drives business with Alstom. Commentators noted that pressure from Asian competitors was the impetus behind the need for the consolidation of the European rail manufacturing sector. The French authorities were reportedly very keen to make the merger happen in the framework of a renewed Franco-German partnership masterplan.

In July 2018, the European Commission opened an in-depth investigation to assess the proposed acquisition, over concerns the merger could reduce competition in the supply of several types of trains and signalling systems. The European Commission signalled concerns that the transaction could lead to higher prices, less choice and less innovation due to reduced competitive pressure in rolling stock and signalling tenders. In September 2018, the Spanish competition regulator announced it had uncovered anti-competitive practices involving a set of companies related to rail networks, including Alstom and Siemens.

On 6 February 2019, the Commission announced the rejection of proposed acquisition of Alstom, in the framework of the EU Merger Regulation. It was argued that the merger would harm competition in markets for railway signalling systems and very high-speed trains. It was also highlighted that the companies did not offer enough alternatives to address these concerns. The decision was met with regret and criticism by the companies and political stakeholders in both countries.

Related Links
Commentary and Analysis
Euro|topics, September 2017: Siemens and Alstom Form European Train Giant to Beat Chinese Competition
Deutsche Welle, 27.09.17: The Siemens-Alstom deal: A closer look
Bloomberg, 14.11.18: Europe’s Railway Giants Take a Fast Train to Nowhere
Reuters, 17.01.19: Why Siemens-Alstom rail merger is creating European tensions
Euro|topics, February 2019: Siemens-Alstom merger facing veto
Bloomberg, 06.02.19: Alstom and Siemens Show How Not to Deal With China
EurActiv, 06.02.19: Six takeaways from Siemens-Alstom rejection
Bruegel: Blog, 11/03/2019: The Alstom-Siemens merger and the need for European champions
EurActiv, 25/03/2019: Europe needs to think in the long-term

The Local (Germany), 27.09.17: Germany's Siemens, France's Alstom merge to create new European rail champion
Deutsche Welle, 27.09.17: Siemens, Alstom merge rail businesses to create 'European champion'
France24, 26.09.17: French high-speed train maker Alstom to merge with Siemens
BBC News, 26.09.17: Alstom and Siemens to create 'European rail champion'
Politico, 06.09.18: Franco-German rail dreams hit unexpected buffer
European Commission: Press Release, 13.09.18: Commission opens in-depth investigation into Siemens proposed acquisition of Alstom
Reuters, 13.07.18: Siemens, Alstom rail merger triggers EU concerns and investigation
Politico, 13.11.18: EU slams Alstom-Siemens rail mega-merger plans
Reuters, 21.01.19: France, Germany step up pressure over Alstom-Siemens deal
Euronews, 17.01.19: Siemens rules out further concessions to get Alstom deal approval
Politico, 06.02.19: Paris and Berlin rail against merger block in Brussels
BBC News, 06.02.19: French-German rail merger blocked by Brussels
Deutsche Welle, 06.02.19: EU blocks Siemens-Alstom merger citing 'serious' competition issues
France24, 06.02.19: European Commission rejects Siemens-Alstom rail merger
Reuters, 06.02.19: Germany regrets EU decision to block Siemens/Alstom deal

Alstom: Press Release, 26.09.17: Siemens and Alstom join forces to create a European Champion in Mobility
European Commission: DG Competition: Merger Case M.8677
Alstom: Siemens and Alstom: creation of a global leader in Mobility
European Commission: Press Release, 06.02.19: Mergers: Commission prohibits Siemens' proposed acquisition of Alstom
European Commission: Statement by Commissioner Vestager on the proposed acquisition of Alstom by Siemens, 6 February 2019
Alstom: Press Release, 06.02.19: Alstom regrets European Commission’s prohibition decision for the merger of its business with Siemens Mobility
Siemens: Press Release, 06.02.19: Planned combination of the mobility businesses of Siemens and Alstom

ESO Records
Franco-German Manifesto ‘for a European industrial policy fit for the 21st Century’

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