Pressure mounting on Vestager to approve Alstom-Siemens merger

EPA-EFE/STEPHANIE LECOCQ

EU Commissioner for Competition Margrethe Vestager and the Commissioner for Environment Karmenu Vella during the weekly college meeting of the European Commission in Brussels, January 23, 2019.

Pressure mounting on Vestager to approve Alstom-Siemens merger


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The EU’s Competition Commissioner Margrethe Vestager is under pressure to reassess and approve a rail merger of Siemens-Alstom despite her own opposition to the deal after coming out in support of rival companies and EU regulators who fear the deal could alter the market.

The Commissioner is due to issue a binding agreement by February 18.

The two companies submitted a revised plan on January 26 in which they hoped to address Vestager’s concerns before she is set to give the EU’s national antitrust authorities time to examine the agreement.

France’s Finance Minister Bruno Le Maire is the strongest champion of the Franco-German deal, favouring the emergence of an Airbus-on-rail company that can withstand competition by China’s state-owned CRRC.

“Alstom and Siemens have just made new concessions to the European Commission to merge and create a world rail champion. There is now nothing to justify a refusal by the European Commission of the merger between Alstom and Siemens,” Le Mair Tweeted on January 26.

https://twitter.com/BrunoLeMaire/status/1089496814653501440

Vestager has acknowledged that China represents a major industrial challenge to Europe, but also notes that China’s CRRC focuses mostly on its domestic market and only 9% of its revenue comes from international sales. Given the absence of a Chinese presence in Europe, Vestager does not see the rationale for undermining competition in the EU market.

The decision ultimately requires consensus by the EU’s 28 commissioners and will require a consensus to pass. At the same time, European Parliament elections are looming and there are growing concerns about national reactions to the deal.

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