EU antitrust regulators are expected to allow Alstom, a French rail-maker, to buy Bombardier’s rail business today. After blocking the
EU antitrust regulators are expected to allow Alstom, a French rail-maker, to buy Bombardier’s rail business today.
After blocking the proposed merger of Alstom and Siemens last year, the European Commission (EC) expressed concerns regarding potentially unfair competition over the Alstom-Bombardier deal, given Bombardier’s 26% market share in Europe and Alstom’s 19% market share. Although the original deadline for the decision was July 16, the EU extended it to today, allowing Alstom to present assets for selling; the assets are believed to include a rail factory in France, a production facility in Germany and a commuter trains unit from Bombardier.
The size of the concessions has likely convinced EU antitrust regulators to allow the deal to proceed. Analysts estimate the deal could be worth close to $7 billion and be completed by the first half of next year. With an estimated $16 billion turnover, the sale would transform Alstom into the world’s second-largest rail-maker after the Chinese-state-owned company CRRC, which generates close to $20 billion in turnover.
Should the deal occur, expect the new Alstom-Bombardier powerhouse to challenge CRRC’s market dominance. This could open another front in the US-China trade war. The company already has significant investments in the US, including a $2 billion partnership with Amtrak. With transatlantic support, the company could push for contracts in developing nations, creating a Huawei-type dispute in the global rail market.
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