Green light for the merger between two rail giants. The European Commission authorized under conditions, Friday July 31, the takeover, by Alstom, of the transport branch of the Canadian Bombardier, giving birth to a rail giant, a year and a half after the aborted marriage of the French group with Siemens.

Before the cessions granted to satisfy Brussels, the new group employs around 76,000 people for a turnover of 15.5 billion euros. By buying Bombardier, Alstom aims to compete with the Chinese CRRC, the world number one in the sector.

"A dialogue of trust"

"Thanks to the comprehensive set of corrective measures proposed to resolve the competition concerns in the very high speed rail, main line and main line signaling sectors, the transaction was promptly reviewed and cleared by the Commission ", welcomed the Vice-President of the European Executive, Margrethe Vestager, quoted in a press release.

[Press release] European Commission approves acquisition of Bombardier Transport by Alstom https://t.co/zWViFz3snG @EU_Competition pic.twitter.com/pIMMHf2Iak

- Alstom France (@AlstomFrance) July 31, 2020

In the morning, the boss of Alstom, Henri Poupart-Lafarge, had assured to wait "with confidence" the decision of the Commission. "The dialogue with Brussels was extremely fluid, extremely rapid, since we announced the transaction with Bombardier in February, so five months after we have the decision," he said.

"I believe that there is a dialogue of confidence which was able to tie itself. Is it the consequence of the difficulties of the previous file [with Siemens] or not? I do not know", he had added. In order to make room for its rivals, Alstom has offered several commitments to the European Commission, guardian of competition in Europe, in particular the sale of its production site in Reichshoffen, located in Alsace, which employs 780 people.

If it had feared a negative impact of the project on competition, the Commission could, before taking a final decision, have launched a more in-depth investigation, which would have lasted around four months.

The transaction must be finalized in the first half of 2021

Alstom had notified mid-June in Brussels of the plan to buy out its competitor Bombardier Transport for 6 billion euros, an operation which must be finalized in the first half of 2021.

The two groups have a virtual monopoly on rolling stock in France, where they collaborate regularly, as on the Paris metro and RER.

The threat of Chinese competition had already been mentioned to justify the takeover of Alstom by the German Siemens, an operation which had been blocked in February 2019 by the Commission, Brussels fearing an overly dominant position in Europe in rail signaling and high speed trains.

The EU should not help the constitution of "bottle-fed and pampered" industrial champions, but let competition stimulate their creation, then replied Margrethe Vestager to those who had challenged her decision, particularly in France.

As far as Alstom and Bombardier are concerned, the activity overlaps were, in fact, much smaller than with the German group, which facilitated the approval of the operation.

With AFP

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