Mergers: Commission clears Alstom’s acquisition of Bombardier, subject to conditions

trains

(Credit: Unsplash)

This article is brought to you in association with the European Commission.


The European Commission has approved, under the EU Merger Regulation, the acquisition of Bombardier Transportation by Alstom. The approval is conditional on full compliance with a commitments package offered by Alstom.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Alstom and Bombardier are leading providers of state-of-the-art trains used every day by  millions of passengers  across the European Union. Thanks to the  comprehensive remedies offered to solve the competition concerns  in the areas of very high-speed, mainline trains and mainline signalling, the Commission has been able to speedily review and  approve this  transaction. Going forward, a stronger combined Alstom and Bombardier entity will emerge. At the same time, thanks to these remedies, the new company will also continue to be challenged in its core markets to the benefit of European customers and consumers.”

Alstom and Bombardier are global leaders in rail transportation. Both companies have a wide product portfolio and compete  in the manufacture and supply of:

  • Very high speed, mainline and urban rolling stock (trains): very high speed rolling stock includes trains operated for long-distance travel at speeds of at least 300 km/h; mainline rolling stock includes intercity and regional trains; urban rolling stock includes metros and trams.
  • Mainline and urban signalling solutions: signalling solutions include signalling systems, installed on railway tracks and on-board units (“OBUs”) that provide safety controls on mainline and urban rail networks. These include  European Train Control System (“ETCS”) OBUs, which are currently being rolled out throughout the EEA to facilitate compliance with European-wide standards, favour interoperability and safe cross-border travel.

The Commission’s investigation

The Commission’s investigation found that the transaction, as initially notified, would have raised serious competition concerns in the following areas:

(i) Very high-speed rolling stock where the merged entity would have become the undisputed market leader with a  significant market position;

(ii) Mainline rolling stock where the merged entity would have strengthened the Parties’ already large combined position in particular in France and Germany, and;

(iii) Mainline signalling where the merged entity would have had the ability and  the incentive to make it more difficult for other suppliers of ETCS OBUs to interface with its many already installed signalling systems (legacy OBUs) and its already operating fleet of trains (the largest in the EEA). Furthermore, the merger risked making the merged an unavoidable supplier of legacy OBUs in the Netherlands.

The investigation confirmed that the proposed transaction did not raise competition concerns in any other markets, in particular within mainline and urban signalling, where Bombardier’s position in the EEA is very limited.

The proposed remedies

To address the Commission’s concerns, Alstom offered a set of commitments:

(i) The divestment of Bombardier’s assets currently contributing to its joint very high-speed platform with Hitachi, the “Zefiro V300”.* Alstom also committed to a series of measures aimed at preserving the joint bid offered in consortium by Bombardier and Hitachi to HS2, the current largest opportunity for the production of very high-speed rolling stock in Europe;

(ii) The divestment of (a) Alstom’s mainline Coradia Polyvalent platform, (b) Alstom’s production facility located in Reichshoffen in France, (c) Bombardier’s mainline Talent 3 platform, and (d) part of* Bombardier’s production facility located in Hennigsdorf in Germany;

(iii) The supply of legacy OBUs and necessary interfacing information and support, in favour of signalling competitors; and

(iv) The supply of legacy OBUs to the Dutch infrastructure manager, ProRail, in favour of all interested operators.

The final commitments address the competition concerns identified by the Commission regarding Alstom’s acquisition of Bombardier, and were significantly improved following the feedback received by market participants. The Commission therefore concluded that the proposed transaction, as modified by the commitments, would raise no competition concerns.

The Commission’s decision is conditional upon full compliance with the commitments.

Companies and products

Alstom, based in France, is active worldwide in the rail transport industry, offering a wide range of transport solutions (from high-speed trains to metros, trams and e-buses) and related services (maintenance and modernisation), as well as products dedicated to signalling solutions, passengers and infrastructure, rail electrification systems and digital mobility.

Bombardier Transportation is the global rail solutions division of Bombardier, a diversified industrial group based in Canada with activities in the construction, property, telecoms and media sector. Bombardier Transportation, headquartered in Germany, offers a wide range of rail solutions, ranging from trains to sub-systems and signalling, to complete turnkey transport systems, and services.

Merger control rules and procedures

The transaction was notified to the Commission on 11 June 2020.

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). If commitments are proposed in Phase I, the Commission has 10 additional working days, bringing the total duration of a Phase I case to 35 working days, such as in this case.

More information will be available on the Commission’s competition website, in the public case register under the case number M.9779.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

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

New EU rules ensure better protection for 120 million holidaymakers this summer

European Border and Coast Guard: 10 000-strong standing corps by 2027

Google succumbs unconditionally to EU’s “right to be forgotten” ruling

COVID-19 will hit the developing world’s cities hardest. Here’s why

Tributes for ‘role model’ former UN refugee agency chief, Sadako Ogata

The big five EU telecom operators in dire straights

AI can wreak havoc if left unchecked by humans

Clamp down on illegal trade in pets, urge Public Health Committee MEPs

As conflicts become more complex, ‘mediation is no longer an option; it is a necessity’, UN chief tells Security Council

We are ‘burning up our future’, UN’s Bachelet tells Human Rights Council

Hydrogen isn’t the fuel of the future. It’s already here

5 ways COVID-19 has changed workforce management

Terrorism and migrants: the two awful nightmares for Europe and Germany in 2016

EU job-search aid worth €2 million for 500 former shipbuilding workers in Spain

France pushes UK to stay and Germany to pay

Where EU air pollution is deadliest

China rare earth prices soar on their potential role in trade war

Harmonised Unemployment Rates (HURs), OECD – Updated: February 2020

UN spotlights wellbeing of seafarers on International Day

‘Much more’ can be done to raise awareness about the plight of persons with albinism: UN chief

UN-backed intercultural dialogue forum urged to keep working to ‘bridge gap between the like-minded’

EU joint response to disasters: deal reached with Council

Combatting terrorism: Parliament sets out proposals for a new EU strategy

This South Korean city once had the biggest coronavirus outbreak outside of China. Now it’s reported zero new cases

Commission moves to ensure supply of personal protective equipment in the European Union

5 crises that could worsen under COVID-19

Finland has just published everyone’s taxes on ‘National Jealousy Day’

ITU Telecom World 2017: exploring smart digital transformation

European Parliament calls on Russia to end occupation of Georgian territories

5 neuroscience hacks that will make you happier

RescEU: MEPs vote to upgrade EU civil protection capacity

All for equality – 2020 is a pivotal year for Gender Equality

Deeper reforms in Korea will ensure more inclusive and sustainable growth

UN Climate Action Summit concludes with insufficient EU and global pledges

Milk, fruits and vegetables distributed to schoolchildren thanks to EU programme

China’s cities are rapidly becoming more competitive. Here’s why

Security Council must ‘come together’ to address the plight of children trapped in armed conflict, says UN envoy

EU Migrant Crisis: Italian Coast Guard Headquarters and Italian Navy to give host national opening addresses at Border Security 2016 in Rome

New EU-UK agreement is welcome but thorough scrutiny remains, insist lead MEPs

Coal addiction ‘must be overcome’ to ease climate change, UN chief says in Bangkok

EU27 leaders unite on Brexit Guidelines ahead of “tough negotiations” with Theresa May

How to get young people in Europe to swipe right on voting

This is Amsterdam’s ambitious plan to turn its transport electric

Reforms in Latvia must result in stronger enforcement to tackle foreign bribery and subsequent money laundering risks

Parliament boosts consumer rights online and offline

What is systemic racism, and how can we combat it?

EU Council approves visa-free travel for Ukraine and cement ties with Kiev

Powering a climate-neutral economy: Commission sets out plans for the energy system of the future and clean hydrogen

Marginalized groups hit hardest by inequality and stigma in cities

OECD joins with Japan to fight financial crime by establishing new academy

The business case for diversity in the workplace is now overwhelming

EU Parliament and Council: Close to agreement on the bank resolution mechanism

Poor quality is healthcare’s silent killer. Here’s what we can do about it

ECB asks for more subsidies to banks

Global trade is broken. Here are five ways to rebuild it

Intervene, don’t overthink – the new mantra of systems design

We need natural solutions to fight ocean and climate risk

EU Parliament: No EU-US trade agreement without safe data

The MWC14 Sting Special Edition

Italy and Greece zeroed their fiscal deficits, expect Germany’s response

More Stings?

Advertising

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