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2/5, 3:18 PM (Source: TeleTrader)
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Siemens-0.36%

116.78
Chart for: SIEMENS AG  NA O.N.

Alstom+0.63%

41.250
Chart for: ALSTOM

EU likely to block merger with Siemens - Alstom CEO

Alstom SA Chief Executive Officer Henri Poupart-Lafarge said on Tuesday that it is likely the European Commission would vote to block the company's merger deal with Siemens AG. The executive told French Le Figaro that Brussels' decision will probably not be guided strictly by European competition regulations, but by "political prejudices." Poupart-Lafarge said that although the companies want to "defend the creation of a European champion," the European Commission accuses them of monopolizing the European rail market.

Earlier today, European Commission President Jean-Claude Juncker stated that Brussels does not block mergers "unnecessarily." Juncker stressed that so far, the EU has "only ever blocked 30 mergers," while approving more than 6,000. On the other hand, the government of France repeatedly said that the proposed merger of two rail giants is a "victim of absurd rules" of the EU.

The Siemens-Alstom agreement has political support in both Germany and France, where it is believed the merger would allow European rail companies to better deal with foreign competition, mainly Chinese CRRC. Brussels is of opinion, however, that the deal would threaten competition in the EU.

Breaking the News / SS