The European Commission is concerned that the merger would lead to higher prices, reduced innovation, and less choice for customers in the European rail market. European Commissioner for Competition, Margrethe Vestager, said in a statement that “The proposed merger between Siemens and Alstom would have created a dominant player in the European rail market, with the combined entity controlling around half of the market for high-speed trains, locomotives, and signaling systems in the European Union.”
Siemens and Alstom are planning to appeal the veto. Both companies believe that the merger is necessary to create a European champion to compete with CRRC. Siemens CFO Ralf Thomas said in a statement that “We are convinced that the merger of Siemens Mobility and Alstom is the best solution to shape the mobility of the future. We will now evaluate the next steps, including legal remedies. As part of this process, we will carefully examine the objections of the European Commission.”
The veto comes as a blow to Siemens and Alstom, who had been hoping to complete the merger by the end of the year. It is also a setback for the European Union, which has been keen to create a European champion in the rail industry.
It remains to be seen what will happen next for Siemens and Alstom. Both companies are likely to appeal the veto, but it is unclear if they will be successful. If the appeal is unsuccessful, Siemens and Alstom could choose to abandon the merger or they could try to find a way to address the European Commission’s concerns.
