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.

Germany-Denmark rail tunnel gets funding green light

The European Commission (EC) has approved state aid for the Fehmarn Belt fixed link.

The project would connect Germany and Denmark via and undersea tunnel from Puttgarden in Germany and Rødby in Denmark. The tunnel would consist of an electrified, double-track railway as well as a four-lane motorway.

The decision by the EC allows for Denmark to continue with the public financing of the project due to the qualification of the project as an Important Project of Common European Interest.

“Following an in-depth investigation, we concluded that the Danish measures to support this project of common European interest are in line with EU State aid rules, as the positive effects of the project clearly outweigh any potential distortion of competition,” said executive vice-president Margrethe Vestager.

Once complete, the Fehmarn Belt fixed rail-road link will go towards the finalisation of the North-South route connecting central Europe and the Nordic countries.

“The Fehmarn Belt fixed link will contribute to the cross-border integration of the two regions it will connect. It will be key to complete the main North-South route connecting central Europe and the Nordic countries to the benefit of the European economy,” said Vestager.

The 19km long tunnel will be owned by Denmark and would be the world’s longest road and rail tunnel.

Rail connections between Hamburg and Copenhagen would drop from almost five fours to three hours and 15 minutes. The tunnel will also carry freight traffic.

The decision by the EC followed an appeal made by ferry lines Scandilines and Stena Line that sought to overturn the Commissions’ 2015 decision approving the public financing model.