* Commitments apply to just 4 pct of sales
* Aim to stave off regulators concerns
* Decision expected by Feb. 18 (Introduces dual dateline, adds background, share price)
PARIS/FRANKFURT, Dec 12 (Reuters) - Alstom and Siemens have agreed to submit measures to the European Commission that would reduce their combined sales by more than half a billion euros in a bid to get their planned rail merger approved, showing they will budge, but not at any expense.
Germany’s Siemens and France’s Alstom agreed last year to merge their rail operations, creating a company with 15 billion euros ($17 billion) in revenue and a workforce of 62,000, but regulators raised concerns over the deal. “The proposed remedies include mainly signalling activities as well as rolling stock products and represent around four percent of the sales of the combined entity,” Siemens and Alstom said in a brief joint statement on Wednesday.
“The parties consider that the proposed remedy package is appropriate and adequate. There is, however, no certainty that the content of this package will be sufficient to alleviate the concerns of the Commission. A decision by the Commission is expected by February 18, 2019,” they added.
Sources close to the companies believe the latest intention is not necessarily to shed assets but to grant licences to competitors in the areas of signalling, where both have high market shares, and in rolling stock.
Rivals have said that the power of the combined company could shut them out of the European market, and the European Union’s antitrust regulator had sent a series of objections to the groups forcing them to come up with specific concessions. Opening the probe earlier this year, EU antitrust chief Margrethe Vestager said the deal, that could create a global leader with three times the market share of its close rivals, might lead to higher fares for travellers. The 2017 deal agreed between Siemens and Alstom was also aimed at creating a European champion to challenge the advance of China’s state-owned CRRC, and Canada’s Bombadier Transportation.
Nevertheless, some French opposition politicians had also voiced concerns that the deal could see France would lose control of the TGV high-speed train given that Siemens also makes the ‘ICE’ high-speed trains.
A note from equities researchers Alpha said the proposed move was “slight sentiment positive but in line with latest signalling.”
Siemens shares were 0.3 percent up at 0830 GMT. (Reporting by Sudip Kar-Gupta and Alexander Huebner; writing by Vera Eckert in Frankfurt, editing by Maria Sheahan and Alexandra Hudson)