The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Thales’ ground transportation business (‘GTS’) by Hitachi Rail. The approval is conditional on full compliance with commitments offered by Hitachi Rail.
The Commission’s investigation showed that the transaction, as initially notified, would have reduced competition and led to higher prices and less innovation in the markets for rail mainline signalling projects in France (including interlockings, overlay and resignalling projects) and Germany (including overlay and resignalling projects). On these markets, the transaction would have combined two close competitors and the merged entity would have acquired very high market shares.
To address the Commission’s preliminary competition concerns, Hitachi Rail offered to divest its mainline signalling platforms in France and Germany for interlockings, overlay and resignalling projects. Following the positive feedback received in the context of the commitments’ market test, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.