Brussels voices doubts over Siemens-Alstom rail merger

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The EU has written to Alstom, the state-controlled maker of France's iconic TGV trains, and German industrial giant Siemens to express doubts about their proposed merger of rail activities.

The historic tie-up announced over a year ago is intended to create a European train-building champion big enough to take on world leader CRRC of China, but the EU launched an in-depth investigation into the deal in July over fears it could damage competition in the supply of trains and signalling systems.

Now the European Commission, the bloc's executive arm, has sent a "statement of objections" to the two companies, setting out what it expects them to do to get the deal approved.

"The Commission can confirm that it has sent a statement of objections to the parties in the Siemens/Alstom case. Our investigation is ongoing," a commission spokesman said.

The two companies have 10 days to respond, while the commission has until January 28 to give its verdict

On Tuesday France's junior economy minister Agnes Pannier-Runacher reiterated Paris's support for the deal.

"It is very important for us because from an industrial point of view the aim is to create European giants -- it is this which will enable us to compete effectively at the global level with US and Chinese operators," she said.

The proposed merger would create a new European rail behemoth, present in 60 countries with an annual turnover of 15.6 billion euros.

Alstom employs 32,800 people worldwide while Siemens Mobility has 28,800 staff.

Announcing the probe in July, competition commissioner Margrethe Vestager said the EU would look into whether the deal would "deprive European rail operators of a choice of suppliers and innovative products, and lead to higher prices, which could ultimately harm the millions of Europeans who use rail transportation every day for work or leisure."

Britain's Office of Rail and Road has also warned the merger would have "significant adverse effects on competition in key railway supply chains" in the UK.

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© 2018 AFP

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