Siemens, Alstom raise doubts about mega merger

MUNICH (AFP/APP): Confidence that the politically sensitive merger of their rail businesses would be waved through by the European Commission was ebbing at both Siemens and Alstom Thursday.

A source at German group Siemens said Brussels had posed “insurmountable” demands for concessions that the groups would not make.

Meanwhile Alstom, maker of France’s iconic TGV trains, said there was “no certainty” the companies could mollify the Commission.

Both Paris and Berlin have thrown their weight behind the proposed Siemens-Alstom tie-up, saying the arrival of Chinese giant CRRC on the global market will put European manufacturers in the shade.

It would be “an economic mistake and a political failing”, as well as a “negative signal to the peoples of Europe” to block the merger, French government spokesman Benjamin Griveaux said Wednesday. If approved, the merger would create a rail behemoth with operations in 60 countries and annual turnover of 15.6 billion euros.

Alone, CRRC’s annual revenues of 26 billion euros outweigh the three Western heavyweights Bombardier, Siemens and Alstom, each of which brings in around eight billion a year.

It has already snapped up significant contracts in US cities like Boston, Los Angeles and Philadelphia, as well as in European nations like Serbia, Macedonia or the Czech Republic.

But the alleged Chinese danger has failed to impress EU Competition Commissioner Margrethe Vestager.

The Financial Times reported Wednesday that she was unmoved by pleas from the two capitals, urging other members of the EU’s executive arm to stick to existing antitrust rules.