It's official. The European Commission says No to the marriage between the French company Alstom and the German Siemens. The wedding would have led to the birth of a railway giant with operations in 60 countries and an annual turnover of 15,6 billion euros.
The motivation is written in black and white in a note issued by Brussels which reads that the merger “would have affected the competition in the markets for railway signaling systems and high-speed trains. The parties have not proposed sufficient corrective measures to address these issues. According to the number one of the EU Antitrust, Margrethe Vestager, "this concentration would have resulted in higher prices for signaling systems that guarantee passenger safety and for future generations of very high-speed trains".
"Brussels blocked the merger because the two companies refused to address our serious antitrust concerns," specified the Eurocommissioner.
We need signaling systems to keep us safe & very high speed trains for climate friendly transport. @SiemensMobility and @Alstom are champions in the rail industry. Without remedies the merger would have resulted in higher prices, less choice & innovation, so the merger is blocked.
- Margrethe Vestager (@vestager) 6 February 2019
The news had been anticipated this morning by the French Finance Minister, Bruno Le Maire according to which the European stop would represent a big "mistake" that will "favor China's interests". “I think – said the minister interviewed by France 2 – that the games are over. I deeply regret it because I consider it an economic mistake ”,“ a political mistake ”that“ weakens Europe ”, he added.
France and Germany until the end tried everything to get the Yes to the merger between the two companies, stating in several places that the wedding would be the only way to put a stop to Chinese competition, especially after Beijing's go-ahead for the merger of the two large state-owned companies active in the railway sector. According to Le Maire, Brussels' decision "prevents Alstom and Siemens, the two champions of signals and railways, from merging to have the same weight as the great champion of Chinese industry". For the French minister, in Europe there are "obsolete rules that need to be reformed".
Not surprisingly, after the official No, the minister wrote on Twitter: “Now we must look to the future and re-establish the rules of European competition. With my German counterpart, Peter Altmaier, we will make proposals to re-establish these rules and have a more ambitious European industrial policy".
Alstom-Siemens : Il faut désormais se tourner vers l'avenir et refonder les règles de la concurrence européenne. Avec mon homologue allemand @peteraltmaier, nous allons faire des propositions pour refonder ces règles et avoir une politique industrielle européenne plus ambieuse pic.twitter.com/IOx3OtQk3P
- Bruno Le Maire (@BrunoLeMaire) 6 February 2019
We recall that at the end of January the two companies had decided to "further modify the remedies" offered to the EU Commission “to address fears” of adverse effects on competition. Countermeasures which, however, the EU commissioner for competition judged insufficient.
The novelty seems to have had a positive effect on the Alstom title which, on the Paris Stock Exchange, shoots up gaining 4,9%. The performance of Siemens shares was different, dropping 0,5% to 95,78 euros in Frankfurt.
"The Fim Cisl considers this decision as the result of a model and of a European season to overcome - comments the trade unionist Marco Bentivogli - the Alstom/Siemens merger would have built a European champion in the railway sector, capable of measuring up against international competition, in particularly with the Chinese giants of the sector. Attention to respect for competition, with respect for citizens and businesses in the sector, must take into account the changed framework of the international economy”.
