(CercleFinance.com) – The British Competition Authority estimated on Thursday that the proposed acquisition of Thales’s rail signaling activities by Hitachi Rail was likely to lead to a weakening of competition.
Following its investigation, the CMA (Competition and Markets Authority) determined that the transaction, estimated at 1.7 billion euros, was likely to reduce competition in the market for main line rail signaling and urban trains.
‘If the merger were to take place, there would be fewer credible bidders in mainline digital signage tenders, which could increase Network Rail’s costs and negatively impact the digitalisation of the UK rail network’ , she judges in a press release.
Network Rail is the operator of the UK rail network.
Following these findings, the CMA now plans to hold consultations to consider potential remedies that would ensure the protection of competition in the marketplace.
These measures could range from the obligation for Hitachi or Thales to sell some of their activities to the outright blocking of the merger project, she underlines.
Listed on the Paris Stock Exchange, the Thales share lost 1.4% in the wake of these announcements, underperforming a Parisian market which was sailing around equilibrium.