Awards, contracts & appointments

18.12.18

Siemens and Alstom offer to sell high-speed train technology to address EU antitrust concerns

Engineering giants Siemens and Alstom have offered to sell their high-speed train technology as part of a concession package to address EU antitrust objections over the proposed merger.

The German and French train companies submitted their concessions to the European Commission last week as they tried to quell concerns from the commission and industry rivals that the merger would negatively impact competition in the sector, with both Network Rail and the ORR speaking out against the move.

Now, sources close to the matter have revealed that the companies have offered to sell either one of their high-speed train technologies, as reported by Reuters.

The other major element of their proposal to the EU Commission consisted of selling the bulk of Alstom’s signalling business in Europe in addition to some of Siemens signalling assets, one source said.

In Siemens’ and Alstom’s statement last week, they said: “The proposed remedies include mainly signalling activities as well as rolling stock products and represent around 4% of the sales of the combined entity. The parties consider that the proposed remedy package is appropriate and adequate.”

Responding criticism from major players and competitors in the rail industry, the European Commission sent out an anti-trust warning with a series of objections to the merger in November, suggesting that Siemens and Alstom would likely need to sell a substantial part of their assets to secure EU approval.

This followed a full-scale investigation into the proposed deal over concerns that the new combined company would reduce competition in the supply of several train fleets and signalling systems.

The FT reported last week that Margrethe Vestager, the EU’s competition commissioner, was unconvinced by the companies’ argument that the merger was necessary to fend off Chinese rivals.

Sources said that the companies have now offered to divest either Alstom’s Pendolino platform – a tilting technology which reduces braking before bends and is tailored for high-speed rail lines – or Siemen’s Velaro Novo platform.

The commission has given rivals and customers this week to submit feedback to the concessions, and more negative feedback could see it demand further action from Siemens and Alstom before it makes a ruling by 18 February.

Image credit - Sven Hoppe DPAPA Images

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