EUROPE: Having been formally notified of the proposed transaction on April 4, the European Commission confirmed on May 12 that it would undertake an in-depth investigation into whether the planned US$1·8bn acquisition of Faiveley Transport by Wabtec of the USA is in line with the EU Merger Regulation.
The investigation had been expected by Wabtec, and does not prejudge the outcome. The Commission has 90 working days (until September 20) to take a decision.
The Commission said it was concerned that the takeover may reduce competition in the railway systems and subsystems market in the European Economic Area. It has particular concerns about braking systems and pantographs, where it said the technical and regulatory requirements pose high barriers to market entry.
The Commission said its initial investigation had shown that the proposed merger would ‘remove a significant competitor from an already concentrated market’. It also had concerns that the remaining manufacturers ‘would be unable to sufficiently compete with and constrain the merged entity to ensure continued innovation and avoid price increases for customers’.
‘Europe is also home to many manufacturers of locomotives and other rolling stock’, said Commissioner for Competition Margrethe Vestager. ‘The Commission must make sure that Wabtec’s takeover of Faiveley does not restrict effective competition and lead to less innovation in this technology-driven market, or to price increases for manufacturers, train operators and ultimately passengers.’
