BRUSSELS (AP) — The European Commission has given its go-ahead to the acquisition of the rail business of Canadian engineering firm Bombardier by French train maker Alstom.
Alstom, which makes the French TGV high-speed trains, said this year it had signed an agreement with a view to buy full control of Bombardier Transportation, for a price 5.8-6.2 billion euros ($6.3-6.7 billion) paid via a mix of cash and new Alstom shares.
The Commission launched an investigation and initially found that the transaction raised serious competition issues. The bloc’s competition authorities cleared the acquisition on Friday after Alstom offered “significantly improved" commitments.
“Alstom and Bombardier are leading providers of state-of-the-art trains used every day by millions of passengers across the European Union,” said Margrethe Vestager, the EU commission vice-president in charge of competition. “Thanks to the comprehensive remedies offered to solve the competition concerns in the areas of very high-speed, mainline trains and mainline signaling, the Commission has been able to speedily review and approve this transaction.”
Buying Bombardier Transportation will help Alstom compete with China’s CRRC, which has been growing its business outside of its home country.
The move will also give more heft to Alstom after its bid to merge with Germany’s Siemens was blocked by European Union regulators worried that it would make it a dominant presence in the region.
The decision to nix that deal was criticized by some European governments who want to create large European companies in various sectors that are capable of competing with state-backed companies in China and as well as U.S. multinationals.
Bombardier Transportation is focused on commuter trains and last year made almost $8.5 billion in sales.