Friday , November 27 2020

Europe blasted the mega rail association between Alstom and Siemens




On Wednesday, the European Commission rejected the merger of the German railway company Siemens and the French rival Alstom, and therefore ignored the calls for permission to compete from China.

"This concentration would have resulted in a price increase for signaling systems that ensure passenger and future generation of high-speed trains," said European Competition Commissioner Margrethe Vestager.

The merger, announced with great fanfare in 2017, was received as the birth of a much-needed European industrialist, a kind of Airbus in the railway sector against the Chinese competition.

However, after several months of investigation, the Commission rejected the operation, also considering that "the parties have not proposed adequate corrective measures to remedy" the problems raised by Brussels.

The Veto, which he had been waiting for in recent days, had confused Paris, where the ministers pressed hard for the merger, considered a necessary measure to compete with the Chinese CRRC, backed by Beijing.

The French Minister of Economic Affairs, Bruno le Maire, had qualified this awaited decision on "errors" when, in his judgment, "will serve China's interests," said the chain France 2.

The Director-General of Siemens, Joe Kaeser, who said last week that "retrograde technocrats" would frustrate the operation, deplored the decision and called on Europe to implement a "structural reform".

"Protecting customer interests at local level should not mean that Europe cannot be on an equal footing with leading countries such as China, the United States and others," he said.

At an industrial conference prior to the announcement, the European Commissioner for Competition had warned against falling into the "trap of believing that the great is always better".

Although he did not specifically refer to the case, the Vestager markets are stronger if their survival "does not depend on one or very few large companies."

Brussels veto leaves a personal mark on Vestager in the eyes of France and Germany, after being regarded for many years as a rising star in the EU.

The European Commissioner was hailed as a European heroine after surpassing American tech giants Google, Facebook and Apple.

Following these high announcements, Vestager could be called upon to play a more important role in Brussels after the European elections in May.

& # 39; Stubborn Technocrats & # 39;

The European Commission believes that the alliance would crush smaller groups and increase the prices of railway companies, where it merged into a dominant position for the sale of high-speed trains, among others.

The UK, Netherlands, Belgium and Spain competition authorities strongly supported Vestager and feared the increased costs of their national railways.

Supporters of the operation nevertheless wanted the Commissioner to look beyond Europe in the direction of the increase in CRRC, a unit born of the merger of Chinese companies before it is too late.

"There are no areas such as aviation, railways or banks where the world market should be taken as a reference instead of the European one," said German finance minister Peter Altmaier.

Caught in a political storm, the head of the Commission, Jean-Claude Juncker, defended his competition policy on Tuesday and in an apparent response to Kaeser accused of saying that his institution is "blind, stupid and stubborn technocrats".

The merger proposal was to create a railway giant with activities in 60 countries and an annual turnover of 15,600 million euros ($ 17,800 million).

In itself, CRRC's annual turnover exceeds approx. EUR 26,000 million from the three Western heavyweights Bombardier, Siemens and Alstom estimated at about 8,000 million annually each.


Source link