UK Regulator Says Hitachi-Thales Deal Could Reduce Competition -- Update
By Pierre Bertrand
The U.K.'s competition watchdog said Thursday that Hitachi
Rail's proposed acquisition of Thales's transportation-systems
business could affect costs and quality of service for
Hitachi Rail said it is disappointed by the regulator's
provisional findings, and that the company will closely examine how
it can respond to its concerns.
"We are reviewing the proposed provisional findings as a matter
of absolute priority and we remain committed to addressing the
CMA's concerns through a cooperative approach. Our focus now is to
find the best potential mitigations and an appropriate way
forward," the Japanese company said in a statement.
Thales said that it too was reviewing the CMA's findings and
added, when approached by Dow Jones Newswires, that discussions
with the European Commission were continuing as planned.
The Competition and Markets Authority said the deal "could lead
to a substantial lessening of competition in the supply of digital
mainline and urban signaling rail systems."
The acquisition could also lead to reduced choice for Network
Rail and Transport for London, the CMA said in a statement.
"We have provisionally found that, should the Merger go ahead,
it would reduce the number of signalling suppliers in what is
already a highly concentrated industry, and the resulting loss of
competition could leave transport networks and passengers worse
off," said Stuart McIntosh, the CMA's independent inquiry group
The CMA said it will now consult on potential remedies, possibly
ranging from requiring Hitachi or Thales to sell parts of their
existing businesses to prohibiting the merger altogether, in order
to guarantee competition in the supply of both digital mainline and
urban signaling is protected in the U.K.
Thales and Hitachi Rail entered into negotiations for the sale
of the ground transportation systems business in August 2021 for an
enterprise value of 1.66 billion euros ($1.78 billion).
Thales said it is still aiming to close the acquisition within
the second half of 2023.
Write to Pierre Bertrand at firstname.lastname@example.org
(END) Dow Jones Newswires
June 08, 2023 06:32 ET (10:32 GMT)
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