LONDON (ShareCast) - (Sharecast News) - The European Commission has opened an investigation into Siemens' proposed acquisition of Alstom.
The Commission said it was concerned that the merger could reduce competition in the supply of several types of trains and signalling systems.

Commissioner in charge of competition policy, Margrethe Vestager, said, "Trains and the signalling equipment that guide them are essential for transport in Europe."

"The Commission will investigate whether the proposed acquisition of Alstom by Siemens 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," added Vestager.

The Commission's concerns around the proposed merger of Siemens and Alstom, both of which are global leaders in rail transportation, were that the market share afforded to the merged entity could lead to higher prices, less choice and less innovation due to reduced competitive pressure in rolling stock and signalling tenders.

"This would be to the detriment of train operators, infrastructure managers and ultimately European passengers who use trains and metros on a daily basis," the Commision said.

The Watchdog's initial investigation found that the proposed transaction would remove a "very strong competitor" and reduce the number of suppliers, in terms of rolling stock, and that on the signalling solutions side of things, it would take away a competitor from several mainline and urban signalling markets, making it the undisputed market leader, with around three times the market share of its closest competitor.

As of 1645 BST, Siemens shares had risen 0.27% to €116.76, while Alstom had dipped 0.58% to €39.31 each.

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