EU blocks rail merger in blow to Paris, Berlin

DPA, 06TH FEBRUARY, 2019- The European Commission blocked the planned merger between the railway business of German industrial giant Siemens and France’s Alstom on Wednesday, rejecting global competition arguments in a landmark case closely watched by Paris and Berlin.

The two companies, as well as the French and German governments, promoted the merger as a way of creating a European champion able to take on foreign rivals such as Chinese rail manufacturing giant CRRC.

But the commission rejected the argument, finding that the transaction would have restricted competition in the European railway industry, ultimately hitting consumers.

“This merger would have resulted in higher prices for the signalling systems that keep passengers safe and for the next generations of very highspeed trains,” EU Competition Commissioner Margrethe Vestager said in a statement.

“The commission prohibited the merger because the companies were not willing to address our serious competition concerns,” she added.

The commission said it had received complaints about the planned merger from customers, competitors, industry associations and trade unions, as well as getting negative reactions from several national competition authorities.

Concerns focused on the market in signalling systems - which are crucial to railway safety by preventing collisions - and on very high-speed trains, which travel at speeds of 300 kilometres or more.