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Siemens Alstom high-speed trains
Siemens and Alstom proposed to combine their rail and signaling businesses in order to compete more effectively in global markets.

EU Overrules Siemens and Alstom on Rail Merger

Combination would hurt competition and increase consumer costs, regulators determined.

There will be no merger of the Siemens and Alstom railroad systems divisions after the European Commission rejected the proposed combination, holding that it would have hurt competition and increased consumer costs.

Siemens and Alstom announced their plan to combine the businesses last year, arguing that their respective railroad businesses would compete more effectively against China’s state-owned CRRC Corp. in the global market.

Government regulators in Germany and France (Siemens’ and Alstom’s home countries) had endorsed the merger.

The Commission, which is the European Union’s trade-regulating arm, determined that  CRRC was not a current threat to either Siemens or Alstom in the EU market, and thus that any merger of the two would require some significant asset sales by the prospective partners.

European Competition Commissioner Margrethe Vestager stated: "Without sufficient remedies, 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."

She added Siemens and Alstom had not been able to address the regulator’s competition concerns.

"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," Siemens president and CEO Joe Kaeser responded.

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