Awards, contracts & appointments

06.02.19

Siemens-Alstom merger blocked by EU Commission in landmark decision

The EU Commission has officially blocked a merger between Siemens and Alstom, stating that the companies “were not willing to address our serious competition concerns.”

Despite months of negotiations and both the French and German government’s full backing the merger, several national competition regulators’ protestation against the plans meant that the decision from Brussels was widely expected.

The EU’s commissioner Margrethe Vestager announced it was prohibiting the Siemens-Alstom merger over concerns that the deal would have “harmed competition” in markets for railway signalling and high-speed trains and, without sufficient remedies, would lead to higher prices across the industry.

Following the EU’s antitrust concerns about the merger, Siemens and Alstom submitted a remedy package in December representing about 4% of the companies’ combined sales and including one of the company’s high-speed rail technologies.

The commission had repeatedly stated its objections to the merger and asked for further concessions and, despite a last-minute attempt to sway Brussels with an updated remedy package, announced the rejection of the merger today.

Vestager said: “Siemens and Alstom are both champions in the rail industry. Without sufficient remedies, this merger would have resulted in higher prices for the signalling systems that keep passengers safe and for the next generations of very high-speed trains.

“The Commission prohibited the merger because the companies were not willing to address our serious competition concerns.”

The commission said today’s decision follows an in-depth investigation into the takeover deal which it recognised would bring together two of the largest rail suppliers in Europe, a move which the companies themselves argued would allow them to compete with Chinese rail giants.

The EU Commission said the merger would have created an undisputed market leader and a “dominant player” in signalling and in very high-speed trains, “significantly reducing competition” in both areas.

This would have deprived customers, train operators, and rail infrastructure managers of a choice of suppliers and products, it said in a statement.

Alstom responded to the announcement by calling it a “clear setback for industry in Europe,” stating it regretted that the remedies offered were considered insufficient when it believed they were extensive and addressed all concerns raised by the commission.

The EU’s stance echoes the numerous complaints it said it had received in the lead-up to the decision from competitors, industry associations, unions, and national regulators regarding the negative impact on competition.

It added: “Since the parties were not willing to offer adequate remedies to address these concerns, the Commission blocked the merger to protect competition in the European railway industry.”

The commission has the duty to assess all mergers and acquisitions involving companies with turnovers above a certain threshold, and the decision marks one of the most important test merger cases for the EU since it assumed powers to vet EU mergers.

Image credit - Thierry Monasse/DPA/PA Images

Comments

There are no comments. Why not be the first?

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

GTR start roll out of 200 more defibrillators in stations

12/12/2019GTR start roll out of 200 more defibrillators in stations

Govia Thameslink Railway (GTR) is continuing its roll out of life saving defibrillators at stations across its network. Statistics show that... more >
Grand Central completes £9m refurbishment of rolling stock

12/12/2019Grand Central completes £9m refurbishment of rolling stock

Grand Central has completed a two-year £9m refurbishment of its train fleet, serving the operator’s route linking Sunderland and Hart... more >
Hull Trains release 360 virtual tour of new Paragon Trains

11/12/2019Hull Trains release 360 virtual tour of new Paragon Trains

Hull Trains have released a 360 virtual tour of inside its new Paragon Trains, and are inviting customers to take a look. The immersive vide... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Ye... read more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. Chris Leech MBE, business community manager at the... more > more last word articles >

'the sleepers' daily blog

Maximising efficiency requires investment in data, but it’s rewards for rail could be extensive

14/11/2019Maximising efficiency requires investment in data, but it’s rewards for rail could be extensive

Rail Technology Magazine’s Matt Roberts explains the significant role data can play within the future development of the rail industry. Standing as a cornerstone of the UK transport network, the rail industry is forever striving to innovate and maximise efficiency in all aspects of its work. Data is just one such way of achievi... more >
read more blog posts from 'the sleeper' >

comment

The challenge of completing Crossrail

05/07/2019The challenge of completing Crossrail

With a new plan now in place to deliver Crossrail, Hedley Ayres, National Audit Office manager, major projects and programmes, takes a look at ho... more >
Preparing the industry to deliver trains for the future

04/07/2019Preparing the industry to deliver trains for the future

The move to decarbonise the rail network involves shifting to cleaner modes of traction by 2050. David Clarke, technical director at the Railway ... more >
Sunshine future beckons for South Wales Railways, says 10:10 Climate Action’s Leo Murray

02/07/2019Sunshine future beckons for South Wales Railways, says 10:10 Climate Action’s Leo Murray

Smart electrification is the way to boost clean energy resources, argues Leo Murray, director at 10:10 Climate Action. Contractors are clear... more >
Ambition doesn’t have to be expensive, says Midland Connect's Maria Machancoses

02/07/2019Ambition doesn’t have to be expensive, says Midland Connect's Maria Machancoses

The TCR Midlands conference is only days away and tickets are going fast for the sector event of the year at the Vox Conference Centre in Birming... more >

rail industry focus

View all News

interviews

Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

24/06/2019Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

Andrew Haines, the Chief Executive of Network Rail, has told the Today programme on Radio 4's BBC’s flagship news programme that he wo... more >