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Home / Business / EU rejects merger agreement to create regional iron giant | Business News

EU rejects merger agreement to create regional iron giant | Business News



  The Associated Press

FILE – In this Sept.27, 2017 file photo, Siemens CEO Joe Kaeser, left, and Alstom CEO Henri Poupart-Lafarge attend a joint press conference in Paris. France's Finance Minister Bruno Le Maire said on Wednesday, February 6, 2019, that the EU authorities have decided to reject a merger between France's Alstom and Germany's Siemens railway operations. (AP Photo / Thibault Camus, File) Associated Press

By RAF CASERT and SYLVIE CORBET, Associated Press

BRUSSELS (AP) – The EU authorities on Wednesday rejected a massive rail association agreement between France's Alstom and Germany Siemens in what the two nations had hoped would have created a global competitor to stand up to China.

EU Anti-trust Commissioner Margrethe Vestager said that it would have created a close monopoly on the European market, stifled fair competition and leading to higher prices for passengers.

In her decision, she resisted the political pressure of the EU's two most powerful nations.

"The Commission forbids the merger because companies were not willing to deal with our serious competition problems," she said.

Alstom is best known for making France's TGV and Siemens for Germany's ICE high-speed train. They also make railway signals.

Merger blocking is rare for the EU antitrust office. Over three decades, the EU approved more than 6,000 deals and banned less than 30.

France condemned the decision even before the official announcement, with Finance Minister Bruno Le Maire, who earlier in Wednesday states that the Vestager's decision "will serve economic and industrial interests by China. "

France and Germany wanted to create a European rail giant that could compete with China's state-controlled giant CRRC.

Le Maire said the EU's move will "prevent Alstom and Siemens, the two champions of rail signaling and rail transport, from merging to have the same weight as the Chinese major industrialist."

He called it both a political and financial error ".

"It should serve China's economic and industrial interests," he said.

Le Maire requested a reassessment of European competition rules and said "the relevant market for analyzing the competition is the world market and not the European market." [19659005] On Tuesday German Economy Minister Peter Altmaier pushed the same idea to give more weight to the competition law of the global, unlike the national or European market.

Both the French and German governments defended the merger, but the competition authorities in the UK, the Netherlands, Belgium and Spain expressed concerns that the new company will be in a dominant position that will potentially overcome smaller railway manufacturers and increase market prices

Corbet reported from Paris

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