Will EU regulators block the Siemens-Alstom rail merger?

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EU Regulators Expected to Block Siemens-Alstom Rail Merger

European Union antitrust regulators are reportedly set to veto the proposed merger between Siemens and Alstom, a decision anticipated to be formally announced early next month. Despite support from Germany and France, who view the combination as crucial for European rail industry competitiveness, EU competition officials have expressed reservations. The merger would have created a significant global player, with combined revenues around €15 billion, positioning it as the world's second-largest rail company.
Concerns Over Competition and Market Dominance

The European Commission, led by Competition Commissioner Margrethe Vestager, has indicated that fostering industrial champions should not come at the expense of undermining competition. Specific concerns have been raised regarding the potential impact on the supply of very high-speed rolling stock, citing examples like the Eurostar, which serves routes connecting the UK, France, and the Benelux countries. This apprehension stems from the combined market power the merged entity would wield in rolling stock and signalling sectors.
Insufficient Concessions Offered by Siemens

In an effort to address regulatory concerns, Siemens had proposed concessions, including licensing aspects of its high-speed train business and divesting parts of its signalling operations. Initially, Siemens offered to share its high-speed train technology for a period of five years. However, EU enforcers sought a longer duration for this technology sharing, a demand that Siemens ultimately rejected. Critics, including Germany's cartel office and the UK's Competition and Markets Authority (CMA), along with their counterparts in the Netherlands, Belgium, and Spain, have argued that the proposed concessions did not sufficiently address the competition issues.
National Support Contrasts with EU Scrutiny

The proposed merger received backing from key member states, with Germany and France advocating for its approval to bolster the European rail sector against international rivals, particularly China's CRRC Corp Ltd. However, this national support has not swayed the EU's competition authorities, who maintain a strict stance on maintaining a competitive European market. The potential veto could prompt further debate on revising EU competition rules to better account for non-EU competitors and global market dynamics.

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Will EU regulators block the Siemens-Alstom rail merger?

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