Rail franchises operators & contracts

21.12.18

National competition regulators write to oppose Siemens-Alstom merger

The UK’s competition watchdog has written to the EU Commission with the backing of several European regulators in a bid to halt the Siemens-Alstom merger unless the two companies make much bigger concessions.

The Competition and Market Authority and national regulators from Spain, Belgium and the Netherlands have expressed their concerns that the “overall loss of competition brought about the merger would be both widespread very significant.”

The letter to the EU’s competition commissioner, Margrethe Vestager, stated that the concessions proposed by the two European engineering giants “fall far short of what would be required to address all concerns to the required standard.”

Last year, the German and French train manufacturers proposed creating a European rail champion which was capable of rivalling the Chinese competition, but the controversial merger has been criticised by major players in the UK rail such as Network Rail and the ORR.

Following a full-scale investigation into the proposed deal over concerns the merger would reduce competition, the EU Commission sent out an anti-trust warning outlining its objections to the merger.

Last week, Siemens and Alstom submitted its concessions to the merger, which included selling signalling and rolling products and the possibility of selling some of its high-speed rail technology.

This week, ministers from 18 EU states issued a statement in support of reforms to competition law in order “to better take into account international markets and competition in merger analysis.”

But the highly-unusual letter from the national regulators signals the latest progression in a growing battle in Europe over the merger.

In the letter, the regulators’ concerns focus on high-speed rolling stock – the type that could be used for the HS2 project.

The signatories said that the proposed concessions “require a very substantial remedy, typically the full divestment of one or other of the merging parties’ overlapping businesses to a suitable buyer.”

 

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