Siemens-Alstom merger: Will the EC succumb to Franco-German pressures for the sake of May’s EU Elections?

A TGV train in France (Pixabay, 2019)

It was yesterday when executives of Siemens and Alstom met with EU Commissioner Margrethe Vestager in one of their last attempts to convince her to give the green light for their merge. The European Commission (EC) is now left to decide till February 18 whether or not to approve the merger of the rail operations of Siemens and Alstom. In the meantime, both companies agreed to sell a set of assets in an attempt to promote as much as possible the promising acquisition.

However, the EC is profoundly investigating the case and is having numerous concerns as it is believed that this merger will reduce the competition in the supply of several types of trains and signalling systems creating a Franco-German rail monopolistic champion in the EU arena.

Background

The EC was only notified about the decision of Siemens AG to acquire Alstom SA on the 8th of June 2018 despite the two companies had demonstrated their will back in September 2017. Since then, the EU’s executive body has opened an in-depth investigation to assess this merger under the EU Merger Regulation. The EC has until February 18 to inform both companies about its decision.

Both firms have a wide portfolio of high speed trains and safety control systems on mainline and urban rail networks. Together these companies will create a giant EU rail operator which can bring tremendous changes to the market and a monopolistic environment that favours them only and not the European consumers.

EC stance

The EC and especially the Competition chief Margrethe Vestager has logical doubts regarding this acquisition as there is chance that it will lower competition and increase prices. More specifically, Commissioner Margrethe Vestager has mentioned on the case:

“Trains and the signalling equipment that guide them are essential for transport in Europe. The Commission will investigate whether the proposed acquisition of Alstom by Siemens would deprive European rail operators of a choice of suppliers and innovative products, and lead to higher prices, which could ultimately harm the millions of Europeans who use rail transportation every day for work or leisure.”

Siemens-Alstom last merger’s attempts

Last month, competition officials from the UK, Holland, Spain and Belgium sent a letter to Commissioner Vestager where they said that Siemens and Alstom have not made enough compromises as they are required to and by extension this merger should not proceed.

However, both companies are pushing forward the sale of train equipment assets as a last resort to persuade the EC that this acquisition must be materialized. According to Bloomberg though, Alstom supports that no more assets will be sold in order to assure the approval of the EC on the issue.

Franco-German alliance

Both France and Germany support the acquisition of Alstom by Siemens. The will of the two governments to consolidate their power in Europe and their economies ahead of the upcoming EU elections next May is more than apparent. The two companies are merging in order to be able to create an huge EU train maker conglomerate that will be able to compete with the Chinese rival CRRC (China Railway Rolling Stock Corporation) and Canada’s Bombardier Transportation.

French Economy Minister Bruno Le Maire mentioned last Sunday that a decision against this acquisition would affect the European bloc’s industry. In detail, Mr. Le Maire said in a Europe 1 radio interview:

“If the European Commission was to make an unfavorable decision regarding this merger, it would be for the wrong reasons. It would not only be an economic error but also a political mistake because it would weaken the whole European industry faced with China”.

Will the EC succumb to the political pressures or remain unaffected and refuse to the creation of a giant train maker which could change the current status quo? So far, Margrethe Vestager has shown her credibility by enforcing the EU laws strictly even, against US tech giant companies and despite EU’s long love, fear and admiration for the US. Nevertheless, an action such as the one to sell train assets has been welcomed by the EU officials.

Will the train run over the EU consumers?

All in all, it is quite certain that it would be a tough competition decision for the European Commission which has only about a month to consider all aspects and conditions ahead of the imminent European elections. Will the EC decide as a political stakeholder or regulator?

What matters the most at the end of the day is not to please the shareholders of two of the biggest companies in Europe so that politicians can clap their hands at the EU elections night, but above anything else to protect the rights of the EU consumers who would be always left to be a helpless pray to any giant monopoly in the Old Continent.

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

Fail fast, fail better: 3 ways companies can master innovation

Cyprus Parliament says no to blackmail

To tackle climate change, we need city diplomacy

How transparency can help the global economy to grow

UN member states express their will to tackle global migration but specific actions are still missing

Civil society organisations disenchanted with “Youth Guarantee”

Food safety critical to development and ending poverty: FAO deputy chief

Hunger and obesity in Latin America and the Caribbean compounded by inequality: UN report

Long-term EU budget: MEPs lay down funding priorities for post-2020 budget

Eurozone: Despite anemic growth and shaky banks marks record trade surplus

EU confronts environmental threats as global leaders attempt to revive the global sentiment at NYC climate week

The China-US trade deal will be signed on time; the path is set

South Sudan’s foreseen genocide: from “Never Again” to “Again and Again and Again”?

US must abide by humanitarian refugee accords: UN refugee agency

The Catcher in the Rice

New Report Offers Global Outlook on Efforts to Beat Plastic Pollution

How populist and xenophobic movements in the EU tear apart European businesses and startups

Climate Change Revolution: by-laws for the world

EU tells Britain stay in as long as you wish

Here’s how the global financial crisis is still affecting your wages

ECB: A revolutionary idea to revitalize the European economy with cheap loans to SMEs

Who would pay and who is to gain from the EU-US free trade agreement

A Sting Exclusive: why the environment is important to your health, by UNEP’s Head for Europe

Four million Syrian children have only known war since birth: UNICEF

ECB asks for more subsidies to banks

Europe eyes to replace US as China’s prime foreign partner

Youth unemployment: think out of the box

Innovation can transform the way we solve the world’s water challenges

Commission’s spending totally uncontrolled

Could the fourth wave of globalization help to end epidemics?

Security Council urges countries to factor child protection into conflict prevention efforts

Talent is worldwide. Opportunity is not. How can we redistribute it?

EU-China Light Bridge in Brussels signals the bright coming of the Year of The Dog

Greece: Tsipras’ referendum victory does not solve the financial stalemate of the country and its banks

Safer products: stepping up checks and inspections to protect consumers

European Youth Vlog

US-North Korea summit in Singapore ‘a promising development’ says Guterres

World ‘not yet on track’ to ensure children a better future: UN rights chief

ECB should offer more and cheaper liquidity if Eurozone is to avoid recession

Human rights chief calls for international probe on Venezuela, following ‘shocking accounts of extrajudicial killings’

The 28 EU leaders show contempt for the European Elections results

EU Elections: new rules to prevent breaches of data used to influence elections

“Asia-Pacific takes stock of ambitious development targets”, written by the Heads of UNFPA and ESCAP

The importance of pre-departure training for a better understanding of global health issues

Does the West play the Syrian game in Egypt?

Building an Inclusive ICT Innovation Ecosystem

How blockchain can cut the cost of new medicine

SDGs and the historical and economic impact on Brazilian health

Nicaragua must end ‘witch-hunt’ against dissenting voices – UN human rights experts

3 ways to ensure the internet’s future is creative, collaborative and fair

China Unlimited Special Report: at the heart of Beijing

EU will not deliver on promises without democratic accountability

Iraq: UN demining agency rejects desecration accusations, involving historic Mosul churches

Gas pipeline in the European Union. (Copyright: EU, 2012 / Source: EC - Audiovisual Service / Photo: Ferenc Isza)

EU Investment Bank approves € 1.5bn loan for Trans Adriatic Pipeline (TAP)

Will Europe be a different place this Monday?

Easing funding woes for UN agency assisting Palestine refugees a ‘wise investment for today and the future’

EU prepares for the worst case scenario as Turkey seems to be withdrawing from the migration deal

The Irish Presidency bullies the Parliament over EU budget

At last some rules on banks

Humanitarian emergency in Venezuela was central debate of the EuroLat plenary

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s