Rail Mega-Merger, Seen as Bid to Counter China, Struck Down by EU -- Update
06 Février 2019 - 12:52PM
Dow Jones News
By Valentina Pop and Emre Peker
BRUSSELS -- The European Union on Wednesday blocked a planned
merger between the rail units of Germany's Siemens AG and France's
Alstom SA, a move critics said would hamper Europe's ability to
compete with China.
The European Commission, the EU's antitrust authority, has long
been skeptical about the deal, arguing it would damage competition
within the bloc. A merger would lead to higher prices for signaling
systems and the next generation of very high-speed trains, the EU
said.
The planned merger -- which would have created a European rail
giant with combined annual revenue of roughly EUR15 billion ($17
billion) -- had the support of French President Emmanuel Macron,
who had said it would create the rail equivalent of European
aircraft maker Airbus SE.
But national authorities from Germany to the U.K. sided with the
commission, countering political arguments in favor of creating a
"European champion" and stressing the need for healthy competition
within the bloc's massive market.
"Siemens and Alstom are both champions in the rail industry,"
European Competition Commissioner Margrethe Vestager said. "The
commission prohibited the merger because the companies were not
willing to address our serious competition concerns."
Berlin and Paris have in recent weeks criticized EU's
competition rules that in their view hamper the bloc's ability to
counter China's increasingly aggressive economic policies. French
Finance Minister Bruno Le Maire told France 2 television Wednesday
that the EU's decision would serve Chinese interests, calling it an
economic and political mistake.
"Europe urgently needs structural reform in the way it shapes
its industrial future in a globally connected world," Siemens
President and Chief Executive Officer Joe Kaeser said in a
statement. "Protecting customer interests locally must not mean
that Europe cannot be on a level playing field with leading nations
like China, the United States and others."
Alstom didn't immediately respond to the decision.
German Economy Minister Peter Altmaier on Tuesday unveiled
industrial policy plans to revamp his country's competitive edge in
relation to China and the U.S., calling for regulators to look
beyond domestic markets and allow the creation of "European
champions."
Any changes to the bloc's competition rules will take several
years before entering into force, however.
Canada's Bombardier Inc., the main competitor of the French and
German rail companies, said Wednesday's decision was "based on the
law and facts," preventing a deal that "would have severely
undermined the health and competitiveness of the whole European
rail market."
Write to Valentina Pop at valentina.pop@wsj.com and Emre Peker
at emre.peker@wsj.com
(END) Dow Jones Newswires
February 06, 2019 06:37 ET (11:37 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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