Thursday, June, 13, 2024 11:24:30

France has recently been reported to step in to save the Siemens-Alstom rail deal from falling through.

The German conglomerate Siemens AG and Alstom SA, the French multinational company have lately been fearing that their rail merger might fail due to concerns about competition that has led Europe’s top antitrust official, Margrethe Vestager, to block the deal. But the French government has arranged for an apparent intervention in saving the deal.

A meeting in Paris has been arranged between European Commissioner Margrethe Vestager and French Finance Minister Bruno Le Maire in which the French minister will reportedly try to convince the commissioner not to block the deal if the right conditions are met as such a step will most likely cause a political blunder.

According to sources, the European Commission was looking to block the deal as it feared that the tie-up would stifle competition in the Europe’s train-equipment market. In the light of such a move, Siemens reported to be considering alternatives business opportunities while Alstom feared that attempts to lure the commission might end in failure as well.

Proposed concessions and lobbying campaigns that warned about Chinese rivals taking advantage of the situation have failed to allay EU objections and people close to the matter expected a veto. Vestager has been reported to say that giving a green signal to the gigantic merger will undermine competition. She also said that allowing such a merger will amount to the Commission’s looking the other way when businesses break EU rules.

Through the deal Siemens planned to merge their mobility unit with Alstom the combines sales of which amounted to €15 billion ($17 billion). The manufacturers have strong backing from both German and French governments and have spent months while getting past respective regulators. The transport giant created as a result of the merger could have rivaled Chinese counterparts.

But the plan for the deal began to unravel when the Commission reportedly issued harsh objections. No comments about the matter have been offered by Alstom, Siemens and the commission representatives.