Brussels, 14/07/2005 (Agence Europe) - The takeover of VAT Technologie AG has been approved subject to the condition that Siemens divests itself of VA Tech's hydro power business and ensures the independence of metal plant builder SMS Demag. Satisfied with the commitments proposed by the German firm, the Commission decided, on Wednesday, to authorise the deal evaluated at EUR 995 million, after which Siemens will control 97.5% of VA Tech shares. The Austrian company, which is the European market leader for key components used in hydro-electric plants, such as turbines and generators, also operates in sectors where Siemens is present, so that their products are used for power stations, electricity supply networks, trains, steelworks and large buildings. “I wanted in particular to be sure that final consumers would not have to pay higher electricity prices passed on to them by suppliers because of more expensive hydro-power plants”, Neelie Kroes, Competition Commissioner, said. The Commission's fears about the merger of Siemens' hydroelectric power plant activities with VA Tech Hydro have been quelled and the latter will finally be sold to an as yet undetermined buyer.
Another condition of the Commission's endorsement of the proposed deal is that Siemens should sell the 28% stake that it holds in SMS Demag, a competitor of VA Tech in the building of steel production plants. Pending this transfer, it is foreseen that the representatives of Siemens in SMS Demag shareholder bodies will be replaced by trustees, thus ensuring the company's independence from Siemens.
The Commission has, moreover, released Bombardier, Siemens' competitor in the rail transport sector, of its obligation to acquire certain traction systems for trams from VA Tech. In April 2000, the Canadian firm had taken this commitment to gain the Commission's agreement for its plan to acquire ADtranz, the rail division of the German-American group, Daimler-Chrysler.