Germany’s Siemens and France’s Alstom have made new concessions in an effort to convince the European Commission to approve their tie-up that would create a rail manufacturing giant, Alstom said Monday.
Alstom said in a statement that it and Siemens had “decided to further modify the remedies so as to answer the concerns raised” by the Commission over the deal’s impact on competition.
It added, however, that the value of the businesses it proposes to sell off remains unchanged at roughly four percent of their combined sales and that the new offer “preserves the industrial and economic value of the deal”
The planned merger unveiled in September 2017 was billed as a defensive move as the Chinese giant CRRC expands onto the global market.
While an Alstom-Siemens tie-up would create a company with operations in 60 countries and annual turnover of 15.6 billion euros ($17.8 billion), that still pales in comparison with CRRC’s annual revenues of 26 billion euros.
Siemens and Alstom have previously offered to sell off some business activities and license other technologies, hoping to allay Commission fears the new combination could dominate the European market for rail signalling and high-speed trains.
But Siemens has been adamant it will not give up its next-generation high-speed technology to secure the EU’s green light.
According to two sources close to the dossier, the new offer could see the companies extend the duration of licenses for high-speed train technology, and expand it to certain countries outside Europe.
Regarding signalling, the two firms are offering to sell off additional activities.
Despite public support by top French and German officials in recent weeks, the deal has been seen as increasingly at risk of failing to win approval by the Commission.
EU Competition Commissioner Margarethe Vestager has repeatedly expressed doubts over the deal.
Siemens chief executive Joe Kaeser allowed himself an unusual Twitter outburst at Vestager Monday after she tweeted from a Liberal party conference that “we want to change Europe because we love it”.
“Those who love Europe should shape its future, not lose themselves in backward-looking formulas,” Kaeser responded.
“It must be bitter to be technically right but to do everything wrong for Europe,” he added, in an apparent acknowledgement the rail deal would likely be blocked.
Alstom said there is “still no certainty that the content of this package will be sufficient to alleviate the concerns of the Commission.”
It added the Commission is expected to announce a decision by February