April 19, 2013

EC approves Siemens' acquisition of Invensys Rail

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THE EUROPEAN Commission has cleared Siemens' $US 2.8bn acquisition of Invensys Rail following an investigation into the potential effects of the takeover on the railway signalling market, which concluded the transaction would not adversely affect competition.

The EC says its investigation confirmed that Invensys Rail and Siemens are not close competitors and that the merged entity would continue to face competition from a number of other strong players in the signalling market, including Alstom, Ansaldo STS, Bombardier, and Thales.

The Commission looked at the possible impacts of the acquisition in the markets for both signalling projects and products in the mainline and mass transit sectors in the European Economic Area as a whole and the specific member states where Siemens and Invensys are most active. It found that the two companies had geographically complementary activities, and that signalling customers would continue to enjoy "significant buyer power."

Folowing a strategic review of its activities, Invensys announced last November that it would sell its rail business to Siemens on a cash free/debt free basis. Siemens says it the EC's decision means it is on course to complete the transaction as planned in the second quarter of this year.

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