Last year, the French railway technology group Alstom failed to try to merge with the train division of Siemens. The EU Commission is now allowing the multi-billion dollar merger with Bombardier Transportation to become the second largest railway manufacturer in the world.
The French railway technology group Alstom has received permission from the EU competition authorities to take over the train division of the Canadian company Bombardier. However, there is a requirement that Alstom fully meets its commitments, as announced by the European Commission. Thousands of employees in Germany are also affected.
To resolve concerns of the EU Commission against the takeover, Alstom and Bombardier announced three weeks ago that they would sell the Bombardier production facilities at the Hennigsdorf site near Berlin. Bombardier Transportation also plans to hand over its project share in the cooperation for the V300Zefiro high-speed train.
The two companies are among the world leaders in rail transport. Alstom is best known for the construction of the TGV high-speed trains, but also produces rail vehicles for local and regional traffic, as well as signaling and other rail technology. Unions recently feared that Bombardier and Alstom sites could be at risk from the takeover. Bombardier Transportation has several plants in Germany, Alstom operates its largest plant in Germany. According to earlier information, both employ more than 9,000 people in Germany.
Building European leaders
The deal is controversial, as Alstom failed last year to try to merge with Siemens' train division due to concerns from EU competition watchdogs. At that time, both the German government and the French government had been disappointed with the decision of the EU Commission. Now the only thing from Berlin was: "The Federal Ministry for Economic Affairs and Energy takes note of today's decision by the European Commission. The European Commission alone was responsible for examining the merger under competition law."
Most recently, France's Economics and Finance Minister, Bruno Le Maire, had built up political pressure and warned against doing business with Bombardier as well. He argued that building European leaders should be enabled to remain internationally competitive.
The Alstom group announced the planned business with Bombardier in February. According to the information given at the time, it will cost the French about 5.8 to 6.2 billion euros. If everything goes smoothly, business should be completed in the first half of 2021.
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