Merger deal of Alstom and Bombardier approved
The European Commission has finally allowed Alstom to purchase Bombardier Transportation. However, both companies should fulfil some commitments. The deal will be completed in the first half of 2021.
The transaction was notified to the Commission on 11 June. It has been reviewing for a month and a half. On Friday, 31 July, the body issued a positive decision regarding the planned merger deal. “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,” the European Commissioner for Competition Margrethe Vestager noted.
Concerns and commitments
During the investigation, the European Commission found serious competition concerns in three areas such as very high-speed and mainline rolling stock as well as mainline signalling. Regarding the third area, the body paid special attention to the Netherlands. Therefore, the Commission proposed Alstom and Bombardier to fulfil several commitments in order to finalise the deal:
- Bombardier Transportation should divest the assets currently contributing to its joint very high-speed platform with Hitachi known as the “Zefiro”. Meanwhile, Alstom, in its turn, also committed to a series of measures aimed at preserving the joint bid offered in the consortium by Bombardier and Hitachi to HS2, the current largest opportunity for the production of very high-speed rolling stock in Europe;
- As for the mainline rolling stock, Alstom is obliged to divest its Coradia Polyvalent platform and the production facility in Reichshoffen, France. Bombardier will get rid of its Talent 3 platform and the manufacturing facility in Hennigsdorf, Germany;
- Regarding mainline signalling, both companies will supply of legacy onboard units (OBUs) and necessary interfacing information and will support, in favour of signalling competitors. In addition, they will 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,” the European body reported.