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Siemens, Alstom rail merger triggers EU concerns and investigation

Reuters  |  BRUSSELS 

By Foo Yun Chee

BRUSSELS (Reuters) - and Alstom's plan to create a Franco-German rail champion could reduce competition and lead to higher fares for travellers, EU antitrust regulators said on Friday as they opened a full-scale investigation into the deal.

German group and French rival announced the planned rail merger in September last year, an boost for French which, however, has triggered criticism from opposition politicians.

said the tie-up would protect jobs but critics fear French loss of control of the iconic TGV high-speed train. The combined TGV and Siemens' ICE-high-speed trains, and signalling and would have 15.3 billion euros ($17.8 billion) in turnover.

The companies are looking to the deal to stave off the competitive threat from bigger Chinese rival CRRC (China Railway Rolling Stock Corporation) and Canada's Transportation.

However, the said the merged company would be a global leader with three times the market share of its closest rival and was unlikely to be constrained by competitors.

The investigation will examine whether the deal would deprive European rail operators of a choice of suppliers and lead to higher prices for the millions of Europeans who use every day for work or leisure, said.

The EU competition enforcer also dismissed Siemens' arguments regarding CRRC, saying potential Chinese suppliers were unlikely to enter the market for rolling stock and signalling in the foreseeable future.

and said they would work constructively with the Commission and reiterated their goal of closing the deal in the first half of 2019.

said the deal warrants a closer look.

"Our view is that this deal will distort fair competition and enable one to leverage dominance in the signalling space to lock-out competition in rolling stock and hold the industry captive, at the expense of all stakeholders," its said.

The EU set a Nov. 21 deadline to decide whether to clear the deal. The companies can offer concessions such as asset sales and pledges to allow or services, to address regulatory concerns.

($1 = 0.8574 euros)

(Reporting by Foo Yun Chee, additional reporting by Alexander Huebner in Munich; editing by and Elaine Hardcastle)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, July 13 2018. 21:43 IST