EU regulators concerned about Siemens, Alstom rail merger, to probe further

BRUSSELS: Siemens 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 industrial group Siemens and French rival Alstom announced the planned rail merger in September last year, an industrial breakthrough for French President Emmanuel Macron which, however, has triggered criticism from opposition politicians.

FILE PHOTO: The headquarters of Siemens AG is seen before the company’s annual news conference

Paris 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 rail technology would have 15.3 billion euros (US$17.8 billion) in turnover.

The companies are looking to the deal to stave off the competitive threat from bigger rival CRRC and Canada’s Bombardier Transportation.

The European Commission said the merged company, a global leader with three times the market share of its closest rival, 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 rail transportation every day for work or leisure, European Competition Commissioner Margrethe Vestager 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.

It set a Nov. 21 deadline to decide whether to clear the deal. The companies can offer concessions to address regulatory concerns.

(US$1 = 0.8574 euros)

(Reporting by Foo Yun Chee; editing by Philip Blenkinsop and Elaine Hardcastle)