The EU's powerful anti-trust sheriff, Margrethe Vestager, vetoed the merger of the Siemens-Alstom rail businesses on Wednesday, earning the fury of France. The tie-up, announced to great fanfare in 2017, had been hailed as the birth of a much-needed European industrial champion, an Airbus for the railways to face down a formidable Chinese rival.
But, after months of investigation and a rejected offer of concessions from the companies, the European Commission in a rare move blocked the hook-up of Germany's Siemens and France's Alstom. "The Commission prohibited the merger because the companies were not willing to address our serious competition concerns," Vestager told a news briefing.
"Without sufficient remedies, this merger would have resulted in higher prices for the signalling systems that keep passengers safe and for the next generations of very high-speed trains." The heavily expected veto brought consternation in Paris, where ministers had lobbied hard for the tie-up, seeing it as a necessary defence to compete against China's state-backed CRRC. Vestager's take on competition is "wild" and "a very outdated idea of the law", thundered French Prime Minister Edouard Philippe in parliament.
French Finance Minister Bruno Le Maire termed the refusal "an economic mistake" that "will serve the interests of China," while junior minister Agnes Pannier-Runacher said Brussels had "lost the plot". Siemens chief executive Joe Kaeser blasted Brussels, saying the veto shows the bloc "urgently" needs reform. Alstom saw "a clear set-back for industry in Europe" and said the quest to merge the companies was now over.
The red light from Brussels will leave a political scar on Vestager in the eyes of France and Germany after years of her being seen as an EU rising star.
Vestager was hailed as a European hero after taking on US tech giants Google, Facebook and Apple, which she ordered in 2016 to pay 13 billion euros in back taxes.
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