Siemens, Alstom Offer New Remedies to Save Deal
(Bloomberg) -- In an unusual 11th-hour move, Siemens AG and Alstom SA have offered a fresh package of concessions designed to allay European Union antitrust concerns that their planned rail merger would hurt competition in the region, according to people familiar with the matter.
The companies have offered to sell signaling assets as well as longer licensing agreements, and have already identified potential acquirers, said the people, who asked not to be named as the discussions aren’t public. Without the remedies, the deal was poised to be blocked by the Europe’s antitrust regulator, Bloomberg News reported last week. The new ones may not be enough to save the troubled tie-up.
Spokesmen for Siemens, Alstom and the European Commission declined to comment. Siemens shares rose as much as 2.3 percent in Frankfurt trading while Alstom stock jumped as much as 5 percent in Paris.
The EU’s top competition official, Margrethe Vestager, has come under intense political pressure from France and Germany to allow the deal to go through, with the governments arguing in favor of the emergence of a European champion to take on competition from China.
The companies first offered up a concession package in December, and attempted to sweeten that package in subsequent conversations with the commission, people familiar with the matter have said, but were unable to sway the regulator then.
At issue for the commission are high-speed trains, which both companies make, as well as the duration for licensing agreements. The commission had asked Siemens to give up licensing for a decade, though the companies were only willing to give five years, people familiar with the matter said last week.
Behind the scenes, the companies have also been looking at options for the units should the merger fail. Siemens CEO Joe Kaeser said this week he was still assuming the merger would be approved, but left all options open for the train unit, including a possible listing of shares.
The commission is set to make a decision by Feb. 18, though the commissioners would likely meet before that date.
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