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Commission clears Alstom's acquisition of Bombardier, subject to conditions

Christian Fernsby ▼ | August 3, 2020
The European Commission has approved, under the EU Merger Regulation, the acquisition of Bombardier Transportation by Alstom.
Bombardier
Commission   Bombardier
The approval is conditional on full compliance with a commitments package offered by Alstom.

Topics: Alstom Bombardier

Alstom and Bombardier are global leaders in rail transportation. Both companies have a wide product portfolio and compete in the manufacture and supply of:

- Very high speed, mainline and urban rolling stock (trains): very high speed rolling stock includes trains operated for long-distance travel at speeds of at least 300 km/h; mainline rolling stock includes intercity and regional trains; urban rolling stock includes metros and trams.

- Mainline and urban signalling solutions: signalling solutions include signalling systems, installed on railway tracks and on-board units (“OBUs”) that provide safety controls on mainline and urban rail networks.

These include European Train Control System (“ETCS”) OBUs, which are currently being rolled out throughout the EEA to facilitate compliance with European-wide standards, favour interoperability and safe cross-border travel.

The Commission's investigation found that the transaction, as initially notified, would have raised serious competition concerns in the following areas:

- Very high-speed rolling stock where the merged entity would have become the undisputed market leader with a significant market position;

- Mainline rolling stock where the merged entity would have strengthened the Parties' already large combined position in particular in France and Germany, and;

- Mainline signalling where the merged entity would have had the ability and the incentive to make it more difficult for other suppliers of ETCS OBUs to interface with its many already installed signalling systems (legacy OBUs) and its already operating fleet of trains (the largest in the EEA).

Furthermore, the merger risked making the merged an unavoidable supplier of legacy OBUs in the Netherlands.

The investigation confirmed that the proposed transaction did not raise competition concerns in any other markets, in particular within mainline and urban signalling, where Bombardier's position in the EEA is very limited.

The proposed remedies

To address the Commission's concerns, Alstom offered a set of commitments:

- The divestment of Bombardier's assets currently contributing to its joint very high-speed platform with Hitachi, the “Zefiro V300”. Alstom also committed to a series of measures aimed at preserving the joint bid offered in consortium by Bombardier and Hitachi to HS2, the current largest opportunity for the production of very high-speed rolling stock in Europe;

- The divestment of

a) Alstom's mainline Coradia Polyvalent platform,
b) Alstom's production facility located in Reichshoffen in France,
c) Bombardier's mainline Talent 3 platform, and
d) part of Bombardier's production facility located in Hennigsdorf in Germany;

- The supply of legacy OBUs and necessary interfacing information and support, in favour of signalling competitors; and

- The supply of legacy OBUs to the Dutch infrastructure manager, ProRail, in favour of all interested operators.

The final commitments address the competition concerns identified by the Commission regarding Alstom's acquisition of Bombardier, and were significantly improved following the feedback received by market participants.

The Commission therefore concluded that the proposed transaction, as modified by the commitments, would raise no competition concerns.


 

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