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European Commission Blocks Siemens' Takeover Of Alstom's Rail Transport Business

The European Commission announced it is prohibiting Siemens' (SIEGY.PK,SMAWF) takeover of Alstom's rail transport business. The Commission, which opened an in-depth investigation last July to assess the merger, found the proposed transaction raised serious concerns in two main areas: signalling systems and very high-speed trains. The investigation showed that the merger would significantly reduce competition in several signalling markets and for very high-speed trains. The merged company would have become, by far, the largest player in Europe and in some signalling markets there would be no competition left, Commissioner Vestager stated.

The European Commission noted that the companies were not willing to propose a clear-cut remedy for either mainline signalling systems or very high-speed trains. The proposed remedies were simply not enough to address the competition concerns, Commissioner Vestager said.

"Less than two weeks ago, Siemens and Alstom made changes to their remedy package. This last proposal did not change the fundamental characteristics of the remedies, neither for signalling systems nor for very high-speed trains. It was only a limited improvement, which did not fully address the competition concerns. Of course, it is up to companies to decide whether to propose the necessary remedies for the deal to be cleared," The Commission stated.

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