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Antitrust agencies say Siemens, Alstom concessions fall short

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Antitrust agencies say Siemens, Alstom concessions fall short
FILE PHOTO: Tullips sit in front of a Eurostar train bound for Amsterdam at St Pancras station in London, Britain February 20, 2018. REUTERS/Simon Dawson/File Photo   -   Copyright  Simon Dawson(Reuters)
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By Foo Yun Chee

BRUSSELS (Reuters) – Britain’s CMA competition watchdog and its counterparts in the Netherlands, Belgium and Spain have teamed up against Siemens <SIEGn.DE> and Alstom <ALSO.PA>, saying they “fall far short” of addressing concerns over their rail deal.

In an unusual move, the four national regulators set out their case against the companies’ plan to create a Franco-German rail champion in a joint public letter on Thursday to European Competition Commissioner Margrethe Vestager.

Vestager is now waiting for rivals and customers to comment on Siemens and Alstom’s offer to sell either one of their high-speed train technologies and the bulk of Alstom’s signalling business in Europe in addition to some Siemens signalling assets.

“It is clear, however, that the remedies ultimately offered by the parties fall far short of what would be required to address all concerns to the required standard,” the four agencies said.

They cited worries about the supply of very high-speed rolling stock for trains such as the Eurostar which links the UK, France, Belgium and the Netherlands. Siemens and Alstom are the two largest suppliers of this product in Europe.

The companies’ signalling offer is not enough to counter their incumbency advantages while important elements such as key intangible assets would not be fully transferred to the buyer, making it difficult to compete with them, the agencies said.

They said technology transfers are also difficult to monitor

“We consider that they (remedies) should not be considered to meet the Commission’s requirements for acceptable remedies,” the watchdogs said.

Separately, Britain’s Network Rail urged Vestager to block the deal, saying it would force up signalling prices.

“From our perspective this proposed merger is anti-competitive and is likely to lead to significantly increased costs in the vital rail signalling market,” Chief Executive Andrew Haines said in an email.

“The proposed concessions do nothing to alleviate the problem and are a long way from the Commission’s requirement for a comprehensive and effective package of measures to support competition. The merger, as currently proposed, should not go ahead,” he said.

The 2017 deal agreed last year between Siemens and Alstom was also aimed at creating a European champion to challenge the advance of China’s state-owned CRRC <601766.SS>, and Canada’s Bombadier Transportation <BBDb.TO>.

(Reporting by Foo Yun Chee; Editing by Keith Weir)

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