EU blocks Siemens-Alstom merger citing 'serious' competition issues

The EU has rejected a merger between rail giants Siemens Mobility and Alstom, citing "serious" effects on competition. The plan would have seen the creation of a European company to rival China’s CRRC.

The European Commission on Wednesday announced its decision to block a merger between Siemens Mobility and Alstoma – who produce the long-distance ICE and TGV trains respectively.

The Commission said the takeover, which would have fused the French and German rivals into a new company, breached anti-trust regulations because it "seriously reduced competition."

"This merger would have resulted in higher prices for the signaling systems that keep passengers safe and for the next generations of very high-speed trains," European Competition Commissioner Margrethe Vestager said.

"The Commission prohibited the merger because the companies were not willing to address our serious competition concerns."

Siemens, Le Maire criticize move

French Economy Minister Bruno Le Maire slammed the decision, calling for reform of the bloc's competition rules.

"It's sadly necessary to look to the future and reform European competition rules. Along with my German counterpart Peter Altmaier, we shall put forward propositions for reforming these rules and and creating a more ambitious European industrial policy," Le Maire said.

Veteran German politician Manfred Weber, who heads the biggest political grouping in the European Parliament, described the decision as "a mistake."

When our companies have to compete with giants double their size, only European champions have a chance in the world's economy. An ambitious Europe means defending European companies & jobs. Today’s announcement by the @EU_Commission on #Siemens & #Alstom is a mistake.

— Manfred Weber (@ManfredWeber) February 6, 2019

The Commission, whose responsibility it is to assess high-value mergers, began investigating the proposal last July. It says the two companies "were not willing to offer adequate remedies" to address its concerns.

Shortly after the announcement however, Siemens claimed it had proposed "extensive" remedies to the Commission and regretted that these were insufficient.

Details of the now-defunct deal:

- Creation of a new Siemens-Alstom Group to be headquartered in France

- Alstom CEO Henri Poupart-Lafarge to head the entity

- Siemens to own 50 percent of shares

- Estimated annual turnover of €15.3 billion ($17.4 billion)

- Touted as "European Champion" to rival China's CRRC

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