|Author (Corporate)||Cardiff EDC|
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.
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.
|Subject Categories||Business and Industry, Internal Markets, Mobility and Transport|
|Subject Tags||Competition Law | Policy, Rail Transport|
|Keywords||Mergers and Acquisitions, Railways
|Countries / Regions||France, Germany|
|International Organisations||European Union [EU]|