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EU: Siemens willing to make Alstom merger concessions

 |  November 8, 2018

Siemens is “willing to make concessions” to gain EU approval for its railway merger with Alstom but it “will find other solutions” if the deal to create a European champion does not materialize.

Joe Kaeser, chief executive of the German company, said the merger of the two groups made economic sense, but there were options should antitrust regulators quash the deal. “We were willing to make concessions, that still holds true,” he added.

A reporter asked Mr. Kaeser if he was angry the deal was being stonewalled by regulators, but he replied that if anything he was relaxed.

His focus for the time being is on dialogue with the antitrust authorities, as “certain interests must be reconciled.” But he said if the deal did not happen it would be OK. “We think it’s the best solution; if it doesn’t materialise we will find other solutions.”

Discussions between the companies and EU antitrust officials are ongoing.

Siemens and Alstom have until mid-December to offer remedies that address the EU’s concerns and EU Competition Commissioner Margrethe Vestager has until late January to decide on the deal.

Ms Vestager is worried that the merger will deprive European rail operators of a choice of suppliers and spark price rises that would ultimately harm consumers.

EU officials detailed their concerns to the parties last week, raising expectations that the companies will have to sell substantial assets in order to secure the EU’s approval.

The merged company would be a strong, large supplier for a number of railway equipment products and services in Europe, but officials are particularly concerned about the combined company’s near monopoly in signalling systems in a number of European countries and its substantial share of the high-speed train market.

Industry participants have publicly raised concerns about the merger, including the UK’s Network Rail, the UK regulator the Office of Road and Rail, and rival Bombardier.

Ms Vestager has pushed back against the merger despite the strong political backing for the companies’ plans from both Berlin and Paris—an uncomfortable position as she enters her last year in office.

The deal would combine Alstom with Siemens’ mobility unit to create a European champion in the rail sector to take on Beijing-backed CRRC—the world’s largest train maker—as it seeks to start selling into the bloc. However, EU officials have questioned that justification, saying that Chinese competition is unlikely in the foreseeable future.

Full Content: Financial Times
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