The proposed acquisition of French rail operator Alstom by Germany's Siemens has been blocked by the European Commission under the EU Merger Regulation. The Commission argued that the merger would have been harmful for competition in railway signalling systems and high-speed trains.
EU Commissioner Margrethe Vestager, who is responsible for competition policy, said: "Millions of passengers across Europe rely every day on modern and safe trains. Siemens and Alstom are both champions in the rail industry. Without sufficient remedies, this merger would have resulted in higher prices for the signalling systems that keep passengers safe and for the next generations of very high-speed trains. The Commission prohibited the merger because the companies were not willing to address our serious competition concerns."
Alstom Headquarters in Saint-Ouen - France. Image: Alstom / A.Pavone
The Commission's decision has come under fire. Bruno Le Maire, the French Economy Minister, said that the decision will "serve the interests of China" and called for reform of EU competition rules.
"It's sadly necessary to look to the future and reform European competition rules. Along with my German counterpart Peter Altmaier, we shall put forward propositions for reforming these rules and and creating a more ambitious European industrial policy," he added.
The Commission's decision followed a six-month investigation of the proposal. It said that neither Siemens or Alstom were "willing to offer adequate remedies". Not long after the decision was announced, Siemens claimed in a press release that it had proposed "extensive" remedies and regretted that they had not been sufficient.
Siemens' chief executive Joe Kaeser said: "Europe urgently needs structural reform... protecting customer interests locally must not mean that Europe cannot be on a level playing field with leading nations like China, the United States and others."
However, the Commission claimed that concerns over Chinese rail giant CRRC, a company which holds around half the global market share, pushing its way into European markets, were unfounded.
"No Chinese supplier has ever participated in a signalling tender in Europe or delivered a single very high-speed train outside China," Ms Vestager said. "There is no prospect of Chinese entry in the European market in the foreseeable future."
She added that although CRRC's 2018 sales, around €29 billion, dwarfed that of both Alstom's €8.3 billion and Siemens €8.8 billion, 90% of the state-controlled corporation's activities were within China, and that they had had "little success" abroad.
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