Again, the Commission raised competition concerns - as did the merger of the Siemens and Alstom train lines, which was ultimately prohibited . Unlike at the time, the companies responded to the concerns of the Commission this time. The key factor in approving the merger was that Alstom and Bombardier were ready to make substantial sales .
The takeover moves Alstom to the second position of the world's largest rail vehicle manufacturers. With 8.2 billion euros (Alstom) and 7.4 billion euros (Bombardier) total sales, the two companies have already been in second and third place. As a result of the fact that the EU Commission is forced to hand over its factories and locomotive series, the total sales of the merged groups should be just under 15 billion euros. Only the Chinese train group CRRC is significantly larger .
The Commission had reservations about the merger in three areas: high-speed trains, regional and long-distance trains in Germany and France, and certain parts of signaling for conventional trains.
Alstom boss Henri Poupart-Lafarge reacted quickly and offered to sell the Alstom plant in Reichshoffen, Alsace, to a competitor. Around 800 employees manufacture the Coradia-Polyvalent regional trains there.
According to Poupart-Lafarge, the merger is not so much about size itself, but above all about the presence in new regional markets that Bombardier traditionally serves and in which Alstom is not or less present.
The EU Commission prevented the merger of Siemens and Alstom a year and a half ago because it would have given it a dominant position in super high-speed trains and signaling technology. The competition authorities in Brussels imposed conditions, among other things, on the levy in the signaling and high-speed train business areas that the companies were not prepared to accept.
Siemens grew even without Alstom
But Siemens apparently does well without Alstom. The company "held its position despite the prohibited merger with Alstom, has even increased its sales and profitability noticeably in recent years," according to a market analysis by the consulting company SCI Verkehr. Alstom and Bombardier, on the other hand, have made commitments that allow competitors to enter the market.
The approval of the EU competition authorities is well received by European politicians. “It is surprising that the commission is waving through the merger. Nevertheless, it is to be welcomed that the bundling of forces in the train sector is possible, "said Andreas Schwab (CDU), spokesman for the internal market of the Christian Democrats in the European Parliament, the Handelsblatt.
Socialist MEP Ismail Ertug (SPD) also sees the green light of the EU Commission as positive. "It is true that we are creating European champions in particular in order to be able to face up to global competition - especially from China in the rail sector," said the traffic expert. However, he worries about the jobs. “In my view, there can be more European champions. But that must not necessarily have a negative impact on employment. "
The decision is of great importance for industrial policy in Europe. Germany and France are pushing to create European champions in competitive industries . In the rail sector, there has been strong competition from Chinese train manufacturers for European producers in recent years.
Critical financial situation at Bombardier
In the meantime, time is running out when Alstom takes over the train manufacturer Bombardier Transportation. Bombardier is in financial trouble. Suppliers, it is said in the industry, have been demanding prepayment for a long time. A new restructuring plan for Germany is currently being worked out with the unions. Bombardier demands wage cuts and plans to cut 1,000 jobs, according to unconfirmed information. Several thousand jobs had already been cut at Bombardier in previous years.
The background is homemade problems. Bombardier often delivered too late and with technical errors. Over the years, millions of euros have been paid to clients.
In addition, there is the existential situation of the Canadian parent company, which builds aircraft as well as railway vehicles. However, a newly developed medium-range model (C-Class) proved to be a financial disaster that drove the company to the brink of ruin. In the meantime, the model series flies under the Airbus direction as the A220. The business areas were once roughly the same size, with sales of $ 9 billion each.
Even so, Bombardier still has to fight for survival. A few days ago, the company announced that it wanted to get through the corona crisis with the help of a billion dollar loan. The Canadians have secured a three-year secured loan of up to $ 1 billion from the investment company HPS Investment Partners.
In the second quarter, the company said it burned around $ 1 billion. Including the promised new loan, the group now has around $ 3.4 billion. The sale of the train division to Alstom is expected to bring additional liquidity. However, Alstom pays the purchase price, which is said to be between 5.8 and 6.2 billion euros, in part with a share swap.
The rail subsidiary Bombardier Transportation is based in Berlin and probably also needs help from the German state. According to a report by the "Frankfurter Allgemeine Zeitung", Bombardier has applied for state guarantees of over 750 million euros. Half of these are to be taken over by the federal government and the states in which Bombardier has plants.
Fusion accelerates consolidation
The merger of Alstom and Bombardier will further accelerate the already ongoing consolidation of the rail technology industry. According to the SCI, the top ten in the industry already control 77 percent of the total market for new rail vehicles. In 2017 it was only 73 percent.
Martin Schmitz, managing director of the Association of German Transport Companies and thus customer representative, therefore regrets the takeover of Bombardier. The elimination of a competitor is “only beneficial for everyone if financial and innovative strength, reliability and product quality are actually strengthened. This also includes securing Alstom / Bombardier's German locations - a prerequisite for maintaining jobs in order to continue to meet the requirements of the German market in the future, ”Schmitz demands.
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