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.