Siemens and Alstom agreed last year to merge their rail operations, creating a company with £13.5million (€15billion euros) in revenue and a workforce of 62,000. The pair argued that the main purpose of the project was to establish a European champion to challenge the advance of China’s state-owned CRRC and Canada’s Bombadier Transportation. But regulators have raised concerns over the deal, claiming it could block competition by effectively dominating the rail sector across Europe. The Competition and Marketing watchdog joined national regulators in the Netherlands, Belgium and Spain to express their opposition to the merger.
In a scathing letter to European competition commissioner Margrethe Vestager, the four nations claimed governments would have “little bargaining power” to protect against price rises.
Siemens and Alston have also done little to address concerns over the deal, saying concessions “fall far short” of offering reassurance to European markets.
Ms Vestager is now waiting for rivals and customers to comment on Siemens and Alstom’s offer to sell either one of their high-speed train technologies.
Alstom has also offered to flow the bulk of its signalling business in Europe in addition to some Siemens signalling assets.
The four agencies said in their letter: “It is clear, however, that the remedies ultimately offered by the parties fall far short of what would be required to address all concerns to the required standard.”
They cited worries about the supply of very high-speed rolling stock for trains such as the Eurostar which links the UK, France, Belgium and the Netherlands.
Siemens and Alstom are the two largest suppliers of this product in Europe.
The watchdogs added: “We consider that they (remedies) should not be considered to meet the Commission’s requirements for acceptable remedies.”
Separately, Britain’s Network Rail urged Ms Vestager to block the deal, saying it would force up signalling prices.
Chief Executive Andrew Haines said in an email: “From our perspective this proposed merger is anti-competitive and is likely to lead to significantly increased costs in the vital rail signalling market.
“The proposed concessions do nothing to alleviate the problem and are a long way from the Commission’s requirement for a comprehensive and effective package of measures to support competition.
“The merger, as currently proposed, should not go ahead.”
The 2017 deal agreed last year between Siemens and Alstom was also aimed at creating a European champion to challenge the advance of China’s state-owned CRRC (601766.SS), and Canada’s Bombadier Transportation (BBDb.TO).