Alstom results

EU clears Alstom’s acquisition of Bombardier

The European Commission (EC) has approved the acquisition of Bombardier Transportation by Alstom, subject to commitments made by Alstom.

Since the acquisition was announced in February 2020, discussions have been ongoing to determine how the merger of the two major rail manufacturing companies would satisfy EU merger laws.

Last month, Alstom proposed a range of measures to get the deal over the line, unlike the previously deal to merge with Siemens, which fell foul of EU antitrust laws.

In a statement, the EC accepted Alstom’s proposal, noting that the two companies compete in areas such as very high speed, mainline and urban rollingstock, as well as mainline and urban signalling.

With the acquisition approved, Alstom will sell its Coradia Polyvalent range of mainline trains and the associated production facilities in Reichshoffen, France. Bombardier’s Talent 3 train series will also be sold, and part of the production facilities for these trains in Hennigsdorf, Germany.

To satisfy EC concerns in the area of high-speed rail, Alstom will divest Bombardier’s stake in the Zefiro V300 joint venture with Hitachi.

In the field of signalling, Alstom will allow competitors access to some onboard signalling units.

EC executive vice-president Margrethe Vestager said the acquisition would enable continued competition in the European rail market.

“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.”

In a joint statement, both companies welcomed the decision of the EC.

“The divestitures will comply with all applicable social processes and consultations with employee representatives’ bodies,” the statement read.

“The transaction remains subject to further regulatory approvals in several other jurisdictions and customary closing conditions.”

The Australian Competition and Consumer Commission (ACCC) has an ongoing review of the merger, which commenced on May 11. August 20 is set as the provisional date for the announcement of the ACCC’s findings.

When the acquisition is complete, expected by the first half of 2021, Alstom will be the second-largest rail-equipment firm, behind Chinese manufacturer CRRC. The combined Alstom and Bombardier Transportation company would have revenues of €15.5 billion ($25.58bn) and would create the European rail champion, which was proposed when Alstom attempted to merge with Siemens.

Alstom results

Alstom proposes divestments to satisfy EU merger laws

Alstom has announced its proposed commitments to respond to potential European Commission concerns regarding its purchase of Bombardier Transportation.

The commitments are part of the process to satisfy the European Commission’s merger regulations.

The actions that Alstom has proposed include the divestment of the Alstom Coradia Polyvalent line and its production facilities at Reichshoffen, in France, as well as the divestment of the Bombardier TALENT 3 platform and its production facilities in Heningsdorf, Germany.

Alstom has also proposed the transfer of Bombardier Transportations contribution to the V300 ZEFIRO very high-speed train.

In signalling and train control, Alstom has proposed to provide access to interfaces and products on some of Bombardier Transportation’s signalling on-board units and train control management systems.

The European Commission is now reviewing these commitments and will make a decision whether to further investigate the procedure by July 16. Third parties are invited to submit observations.

In a statement, Bombardier confirmed its support of the commitments. Both companies confirmed that the acquisition process is on track to be completed in the first half of 2021.

The two companies confirmed that Alstom would acquire Bombardier Transportation in February, 2020, following weeks of rumours. The value of the exchange is between $9.4 and $10 billion.

In Australia, the Australian Competition and Consumer Commission (ACCC) has begun a review of the merger and has set a provisional date for the announcement of findings of August 20. The ACCC will apply the legal test of whether the merger is likely to have the effect of substantially lessening competition in a market.

European states asked to reduce border checks for freight

The European Commission (EC) has requested that all European member states implement ‘green lanes’ on border crossings for freight transport.

The measures follow the disruption of European supply chain networks following border closures implemented to contain the coronavirus (COVID-19). The EC hopes that the green lanes will allow for freight to continue moving through the EU.

Guidelines for the implementation of the green lanes stipulate that no checks and health screenings should take more than 15 minutes, and procedures should be minimised to what is strictly necessary. This involves checks and screening being carried out while drivers remain in their vehicles.

“Our guidance document is intended to protect the EU’s supply chains in these difficult circumstances, and to make sure both goods and transport workers are able to travel to wherever they are needed – without delay. A collective and coordinated approach to cross-border transport is more important today than ever before,” said commissioner for transport, Adina Vălean.

The ‘green lanes’ are encouraged to be implemented across all the border crossing points on the Trans-European Transport Network (TEN-T), the continental network of rail, road, and waterways connecting European countries.

While the measures are designed to speed up the movement of goods, the EC also hopes that reducing unnecessary stops help improve the health of transport workers.

“The green lanes are also specifically designed to protect transport workers at the frontline of this crisis. This set of recommendations will ease their already stressful mission and it will bring more safety and predictability to their work,” said Vălean.

The EC has also encouraged that enhanced hygiene measures should be undertaken at railway stations and transport hubs.