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16 Nov 2018

Siemens’ proposed acquisition of Alstom facing in-depth antitrust scrutiny by EU and Australasia regulators

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Following the European Commission’s (“EC”) opening of a Phase II investigation into Siemens' proposed acquisition of Alstom in July, the proposed tie-up between the EU's largest train makers is facing in-depth antitrust scrutiny both in the EU and abroad.

On 31 October 2018, the EC issued a confidential ‘Statement of Objections’ (“SO”) to Siemens and Alstom which sets out its preliminary conclusions and competition concerns on the proposed merger. Further abroad, each of Australia's and New Zealand's competition regulators have formally published their competition issues on the proposed transaction. A final decision on the proposed tie-up is due to be taken by the end of January next year for the EC and towards the end of this year in Australia and New Zealand.

Given the EC has now issued its SO and prior to the EC issuing its final decision on the proposed tie-up, now is the time for any strategic third party intervention. In particular, third parties may seek to strategically position themselves with the merging parties and the EC alike as desirable suitors for divestments (i.e. business/asset sales) that may be required to secure merger clearance. If this is of interest we can assist you in devising and executing such a strategy.

Finally, it is relevant to note that the Spanish Government has recently opened an investigation into a number of railroad manufacturers (including Siemens and Alstom) after uncovering anti-competitive practices in breach of competition rules. While any impact of this on the EC's review is not immediately evident, what is clear is that this is not at all well timed in the context of the proposed consolidation.

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