On Monday 30 October, the European Commission announced that it had authorised the proposed acquisition of the rail signalling or Ground Transportation Systems business of Thales (France) by Hitachi Rail, a subsidiary of Hitachi (Japan). The authorisation is subject to full compliance with the commitments proposed by Hitachi Rail.
The two entities, which are close competitors, are the main suppliers of railway signalling services in the European Economic Area (EEA).
In its investigation, the Commission found that the transaction, as initially notified, would have reduced competition on the markets for signalling services for mainline railways in France and Germany. In the Commission’s view, the merged entity would have acquired very high market shares. It considered that this quasi-monopolistic market structure would have led to higher prices and reduced innovation in these markets.
Discussions between the Commission and the parties have resulted in a proposal for the structural divestment of Hitachi Rail’s stand-alone businesses in France and Germany, including international sites. Hitachi Rail has suggested, as a remedial measure, committing to divesting its mainline signalling platforms in France and Germany for interlocking, overlay and resignalling projects.
In the Commission’s view, compliance with these commitments will fully remedy the competition problems identified, enabling the divested business to emerge as a viable competitor on the markets concerned.
The Commission points out that the UK Competition and Markets Authority had also examined the transaction and expressed its concerns. In this context, Hitachi Rail also undertook to sell its mainline signalling business in the UK.
Finally, the Commission has announced that it will closely monitor the progress of the structural divestment procedure.
Link to the case in the Commission’s register: https://aeur.eu/f/9cg (Original version in French by Émilie Vanderhulst)