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

3 Aug 2020 01:28 PM

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

Executive Vice-President Margrethe Vestager, in charge of competition policy, recently said: 

"Alstom and Bombardier are leading providers of state-of-the-art trains used every day by  millions of passengers  across the European Union. Thanks to the  comprehensive remedies offered to solve the competition concerns  in the areas of very high-speed, mainline trains and mainline signalling, the Commission has been able to speedily review and  approve this  transaction. Going forward, a stronger combined Alstom and Bombardier entity will emerge. At the same time, thanks to these remedies, the new company will also continue to be challenged in its core markets to the benefit of European customers and consumers.”

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

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

1. Very high-speed rolling stock where the merged entity would have become the undisputed market leader with a  significant market position;
2. Mainline rolling stock where the merged entity would have strengthened the Parties' already large combined position in particular in France and Germany, and;
3. 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.

Click here for the full press release