On Friday, the European Commission approved Alstom’s takeover of Canadian Bombardier’s transport branch and gave birth to a railway giant, one and a half years after the French group’s abortion deal with Siemens.
Green light for the merger between two railway giants. The European Commission conditionally approved, on Friday 31 July, Alstom’s takeover of the Canadian Bombardier transport branch and gave birth to a railway giant, one and a half years after the French group’s abortion with Siemens.
Prior to the redundancies granted to satisfy Brussels, the new group employs around 76,000 people for a turnover of EUR 15.5 billion. By buying Bombardier, Alstom aims to compete with the Chinese CRRC, the world’s largest in the sector.
“A dialogue with trust”
“Thanks to the comprehensive set of corrective actions proposed to address the competition concerns in the very high-speed rail, main line and main line sectors, the transaction was scrutinized and cleared quickly by the Commission”, welcomed the Vice President of the European CEO, Margrethe Vestager, quoted in a press release.
This morning, the head of Alstom, Henri Poupart-Lafarge, had promised to wait “with confidence” for the Commission’s decision. “The dialogue with Brussels was extremely fluid, extremely fast, because we announced the transaction with Bombardier in February, so five months after we made the decision,” he said.
“I think there is a dialogue with trust that could be forged. Is it the result of the difficulties in the previous file? [avec Siemens]or not ? I do not know, “he added.” In order to accommodate its rivals, Alstom has offered several commitments to the European Commission, European competition watchdog, in particular the sale of its production site in Reichshoffen, located in Alsace, with 780 employees.
If it had feared a negative impact of the project on competition, the Commission could, before taking a final decision, launch a more in – depth investigation, which would have lasted about four months.
The transaction must be completed during the first half of 2021
In mid-June, Alstom announced plans in Brussels to buy back its rival Bombardier Transport for € 6 billion, an operation that must be completed in the first half of 2021.
The two groups have a virtual monopoly on rolling stock in France, where they cooperate regularly, as on the Paris metro and RER.
The threat of Chinese competition had already been mentioned to justify the German Siemens takeover of Alstom, an operation blocked in February 2019 by the Commission, which saved Brussels from an overly dominant position in Europe in terms of railway signals and high-speed trains.
The EU should not help create “bottle-fed and spoiled” industrial masters, but let competition stimulate their creation, Margrethe Vestager replied to those who had questioned her decision, especially in France.
In the case of Alstom and Bombardier, the overlaps in the operation were in fact much smaller than with the German group, which facilitated the approval of the operation.