In a shocking turn of events, Margrethe Vestiges, EU competition commissioner, plans to block a deal between French and German interests. The merger of Siemens and Alstom is likely to be rejected by Ms Vestager and the European Commission, but Siemens` chief executive warned that it would reflect the EU and what he called an “absolute naive” mindset. There will of course be a vote of 28 members, commissioners who will formally vote on the matter, likely next week. Ms Vestager has made it clear, according to sources, that these firms can sell assets in high speed train and signaling businesses to secure approval so the deal is possible, only that there must be changes within the firms before it does take place.
Given the high barriers to new entrants into the train business in Europe, Chinese competitors were not likely to enter the market and of course this, according to reports, does have some impact on the on her decision – there will be difficulties meeting standards that of course must be considered. One French banker said that Brussels is not justified in stopping the merger, a view that seems to echoed around Europe.
This particular case is one of the most import since the EU has become part of the vetting process since 1989. So expect to hear more on this issue as China`s CRRC, clearly the world leader in train making will be deeply involved in Europe in the future.