By Foo Yun Chee
BRUSSELS (Reuters) - Siemens and Alstom's plan to create a European rail champion collapsed on Wednesday after EU antitrust regulators rejected the deal, saying that it would have hurt competition and led to higher prices for consumers.
The European Commission also blocked a bid by German copper company Wieland-Werke AG to buy a business unit from Aurubis, Europe's biggest copper smelter, because it could have pushed up consumer prices.
The two vetoes are likely to spur efforts by France and Germany to loosen EU competition rules so as to take a more global than solely European view of mergers and potentially to allow EU ministers to have a say.
Proponents of the bloc's strict merger regime, however, argue that such changes could lead to opaque and unpredictable rules.
Siemens and Alstom wanted to combine their rail operations to compete more effectively with China's state-owned CRRC Corp Ltd on the global stage, a move backed by the French and German governments which promoted the creation of industrial champions.
However, European Competition Commissioner Margrethe Vestager said she blocked the deal to protect competition in the European railway industry.
"Without sufficient remedies, this merger would have resulted in higher prices for the signalling systems that keep passengers safe and for the next generations of very high-speed trains," she said.
She said the companies in both deals were not willing adequately to address the regulator's serious competition concerns and concessions fell short.
The deal also triggered criticism from national competition agencies in Germany, Britain, Spain, Belgium and the Netherlands.
Siemens makes the ICE trains for Deutsche Bahn and also builds units for Channel Tunnel operator Eurostar. Alstom is the manufacturer of France's signature bullet train, locally known as the TGV. The rolling-stock maker also sells urban and suburban trains as well as signalling systems.
Canada's Bombardier said it was pleased with the Commission's decision.
"It would have severely undermined the health and competitiveness of the whole European rail market, leaving European consumers, both as rail users and tax payers, to pay the price," said Daniel Desjardins, Bombardier general counsel and company secretary.
(Reporting by Foo Yun Chee, additional reporting by Philip Blenkinsop, John Revill in Zurich and Sudip Kar-Gupta in Paris; editing by Philip Blenkinsop)
Disclaimer: No Business Standard Journalist was involved in creation of this content
