EU competition authorities ban train merger from Siemens and Alstom ¬ę


The merger of the German group Siemens with France's Alstom in the train sector failed. The European Commission banned the merger on Wednesday, after the two partners failed to make enough concessions to resolve attorney Margrethe Vestager's concerns. This contradicts criticism, with the prohibition of prejudice. EU rules exist to ensure open and fair competition in Europe, Vestager said Wednesday in Brussels.

"Our companies remain so vigilant that a company can not compete overseas if it does not compete at home." Politicians and business leaders accuse Vestager of hampering the creation of European flagship companies that could do better internationally.

Vestager was concerned about a running competition in the industry. Especially for high-speed trains and signal technology, Siemens and Alstom together would be almost without competition. "Without adequate remedies, the merger would have resulted in higher prices for signaling equipment that would ensure the safety of passengers and the next generations of high-speed trains," said the Danish. But Siemens and Alstom were not ready.

Manufacturers of the ICE (Siemens) and TGV (Alstom) high-speed trains wanted better with the merger announced in September 2017 by China's state-owned CRRC Paroli, which is twice as big as the two Europeans, with a turnover of 30 billion euros euros. Siemens CEO Joe Kaeser spoke about "the end of a European headlamp project". But Vestager did not believe that the Chinese would soon compete against the Germans and French in Europe: "As for high-speed trains, the Commission finds it highly unlikely that new competitors from China will put competitive pressure on the parties for the foreseeable future." signs, the Chinese have not yet occurred in Europe. The biggest competitor, Canadian Bombardier, welcomed the decision.

No movement

Siemens and Alstom have reached an agreement with the Brussels veto in advance. "The Commission has not moved much since it made its first assessment," he said in trading circles. The EU has called for concessions that would make the merger unprofitable. Vestager, on the other hand, said that Siemens' proposal to license the new generation of the Velaro ICE platform for more than a decade would not lead its buyers to develop a competitive move. Siemens emphasized that "some well-known and established European suppliers" were interested.

Alstom boss Henri Poupart-Lafarge has ruled out yet another attempt on Tuesday. "There will be no second chance." Siemens said "now you have the time to consider all options for the future of Siemens Mobility and choose the best option for customers, employees and shareholders." The group is considering financial circles, the division of trains already outsourced Mobility alone to bring to the stock market. She is experiencing a contract boom. The Munich industrial group would have held 50% of Siemens Alstom shares.

Review by Vestager

Siemens boss Kaeser strongly criticized Vestager for his refusal. On Wednesday, he said the decision shows "that Europe urgently needs structural reforms to succeed economically in a globally interconnected world in the future." The merger was dubbed "Airbus der Schiene", analogous to the merger of German, French and Spanish companies into a European aircraft manufacturer at the beginning of the millennium.

But the employment of German and French economy ministers Peter Altmaier and Bruno Le Maire for Siemens and Alstom was in vain. But the ruling should fuel the political debate over whether EU antitrust law is still up to date in global competition. Le Maire called the EU's antitrust law "obsolete" on Wednesday. It only uses global competitors. Kaeser had argued that it was better to forge strong companies in Europe than to isolate their own market against foreign competition. He called for the possibility of overturning EU cartel decisions for political reasons – similar to the German "Ministerial License".

(APA / Reuters)


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