The European Commission cites competition concerns for blocking the proposed deal on Wednesday.
The European Union blocked the merger of German rail company Siemens and French-based Alstom on Wednesday because of concerns the proposed merger could have on competition.
The deal would have combined Siemens and Alstom’s transport equipment and service activities into a new company fully controlled by Siemens. The merger proposal planned to create a company with revenues of about 15 billion euros ($17 billion), reported CNBC.
In a statement, the European Commission said it received complaints from customers, competitors, industry associations and trade unions during its in-depth investigation into the deal. The commission reportedly also received negative comments from several National Competition Authorities in the European Economic Area (EEA).
The EU’s competition authority said the proposed merger would have brought together two of Europe’s largest suppliers of various types of railway and metro signaling systems and rolling stock, which would have created an “undisputed market leader” in some signaling markets.
“Without sufficient remedies, this merger would have resulted in higher prices for the signaling systems that keep passengers safe and for the next generations of very high-speed trains,” said EU Commissioner Margrethe Vestager, who is in charge of competition policy, in a statement. “The commission prohibited the merger because the companies were not willing to address our serious competition concerns.”
The German and French governments both supported the merger as a counter to China’s economic rise, according to CNBC’s report.
EU prohibits Siemens-Alstom merger
