A Merger of the Main Competitors in Europe Would Lead to Higher Prices

The European Commission has blocked the proposed rail merger deal between the German company Siemens and the French group Alstom due to competition concerns in the markets for railway signalling systems and high-speed trains. The president of the ZEW – Leibniz Centre for European Economic Research in Mannheim and chairman of the German Monopolies Commission, Professor Achim Wambach, comments on this matter.

“EU competition commissioner Margrethe Vestager has rejected the planned merger of Siemens and Alstom, despite intensive industrial and political pressure. Vestager assumes that both Siemens and Alstom are already big enough players on the world market to be able to compete independently of one other. In addition, it is generally hard to justify why a European champion should be created at the expense of European consumers, i.e. the railway companies and ultimately the railway users.

The EU Commission is convinced that a merger of the two most important competitors in Europe would lead to higher prices on the markets for railway technology. According to the Commission’s view, the competitive pressure that the Chinese group CRRC exerts or is likely to exert in the foreseeable future is too low to approve the merger.”