Rail franchises operators & contracts

13.12.18

Siemens and Alstom submit concessions to EU to secure merger deal

Engineering giants Siemens and Alstom have submitted concessions to the European Commission in a bid to quell raised concerns that the merger between the two would negatively impact competition in the industry.

The announcement by the two companies, made yesterday, highlighted the remedy package to be sent to the EU in response to its statement of objection on 29 October this year, which included an antitrust warning over the proposed plans, arguing that the combined company may reduce competition in the supply of several types of trains and signalling systems.

Remedies to the EC’s concerns include signalling activities as well as rolling stock products—remedies which the two companies claimed as “appropriate and adequate.”

The statement from Siemens and Alstom read: “Alstom and Siemens have jointly agreed to submit a remedy package on 12 December to the European Commission in response to its statement of objection of 29 October. This package represents their proposal to address the commission’s concerns while preserving the industrial and economic value of the deal.

“The proposed remedies include mainly signaling activities as well as rolling stock products and represent around four percent of the sales of the combined entity. The parties consider that the proposed remedy package is appropriate and adequate.

“There is, however, no certainty that the content of this package will be sufficient to alleviate the concerns of the commission.”

The possible merger has been opposed by major players in the rail industry; in July the ORR noted that the Siemens-Alstom joining of services could have a “detrimental impact” on the UK rail market, and in October Network Rail’s CEO Andrew Haines wrote to the commission asking them to intervene in the proposed merger between the two.

A decision by the commission is expected by 18 February 2019.

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