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Siemens-Alstom mobility merger sends wrong signals to European Commission

Siemens-Alstom mobility merger sends wrong signals to European Commission

01 March 2019

The mobility businesses of Siemens and Alstom will no longer merge following the European Commission's decision to block the move. Described by the companies in September 2017 as a Franco-German 'merger of equals', the combined entity aimed to be 'a new European champion in the rail industry' that could compete with 'a dominant player in Asia [that] has changed global market dynamics'. According to the EC, the merger has been blocked because the companies failed to adequately address concerns surrounding competition in markets for railway signalling systems and very high-speed trains. If it had gone ahead the merger would have combined Siemens' and Alstom's transport equipment and service activities in a new company controlled by Siemens. It would have brought together the two largest suppliers of various types of railway and metro signalling systems, as well as of rolling stock in Europe. The EC asserted that the deal would have removed a 'very strong' signalling systems competitor from several mainline and urban signalling markets. Similarly, for very high-speed rolling stock, the proposed transaction would have reduced the number of suppliers by removing one of the two largest manufacturers of this type of trains in the EEA. Siemens and Alstom said their efforts to rectify these concerns 'were extensive in scope and addressed all the concerns raised by the Commission with respect to signalling as well as very high-speed trains.'