The proposed rail merger of German industrial group Siemens Aktiengesellschaft's mobility unit and French rival Alstom SA is increasingly unlikely to gain approval from the European Commission due to continued competition concerns, according to two newspaper reports.
In July 2018, the European Commission opened an investigation into the deal over concerns that it may reduce market competition. The regulatory body is evaluating whether the deal would deprive European rail operators of a choice of suppliers and innovative products, and lead to higher prices. The EC is set to make a decision by Feb. 18.
Ahead of that deadline, Germany's national competition regulator, the Bundeskartellamt, sent a confidential letter to the EC expressing "serious doubts" over the deal and offering support for the commission's own reservations, according to reports from London's Financial Times and Germany's Frankfurter Allgemeine Zeitung.
In the letter, which both newspapers claimed to have seen, the Bundeskartellamt argued that concessions offered by Siemens and Alstom — including an offer to sell either of the companies' high-speed train technology — were "neither suitable nor sufficient" to alleviate competition concerns.
Frankfurter Allgemeine said that the letter signaled that the merger has "little chance" of gaining EC approval. According to the FT, officials who have reviewed the deal so far are in support of blocking it.
Top European Commission officials reportedly will meet to discuss the merger on Jan. 15 before EU competition commissioner Margrethe Vestager makes her formal recommendation to approve or reject the deal.