23.01.19
Siemens-Alstom merger on the brink as French and German officials rally support
Officials from the French and German governments are frantically lobbying to try and save the Siemens-Alstom merger after the EU’s top competition official has said she isn’t swayed by the seemingly final antitrust concessions made by the companies, leaving the merger on the brink.
Bloomberg reported on Friday that Margrethe Vestager’s team were poised to veto the Franco-German merger. Whilst on Monday she told reporters that she was still open to a new proposal, Siemens and Alstom announced last week that no further concessions would be offered.
The EU’s antitrust commissioner said in a press conference: “We are very, very late in the process.”
“Of course the phone is open, the mailbox as well. I wouldn’t say that we will look into things if we wouldn’t. So, as we speak maybe I should check my phone.”
Vestager also said that the EU had no bias against large mergers and the creation of European champions as long as they followed the rules, but implied that the current deal on the table would be rejected.
French finance minister Bruno Le Maire and German economy minister Peter Altmaier have spoken out in favour of the rail merger ahead of a meeting with Vestager.
Le Maire called it “the moment of truth” and said: “The German and French governments are in favour of the merger as are the heads of Siemens and Alstom. It’s the best response to the rising power of the Chinese in the rail sector.”
Altmaier told Reuters: “We need international champions in Europe that are able to compete globally. Talks are in an important phase and we will do everything so that this project has a chance.”
The European Commission has repeatedly stated its objections to the merger, and in December Siemens and Alstom submitted a remedy package, including mainly signalling activities and rolling stock, and was updated to include one of their high-speed rail technologies.
The ORR and Network Rail have both publicly stated their opposition to the merger, and five national competition authorities echoed the EU’s stance that the concessions offered were insufficient.
The EU Commission is primarily concerned that the new Siemens-Alstom rail giant would dominate the market, effectively killing off competition in the market of rolling stock and signalling.
A source from Siemens told Reuters last week that if the commission were to reject the current “appropriate and adequate” deal, then it was prepared to walk away as any further concession would offset the commercial reasons for pursuing the merger in the first place.
Image credit - Shan Yuqi/Xinhua News Agency/PA Images