Commission Clears Alstom's Takeover Of Fiat Ferroviaria

European Report, Sept 20, 2000

The European Commission said on 19 September that it had authorised the acquisition of Fiat Ferroviaria, the railway transport subsidiary of Fiat SpA, by French engineering company Alstom. Through the takeover, it said in a statement, Alstom will get in-house tilting train technology and a foothold in the Italian railway market where so far it had been rather unsuccessful in winning any public procurement bids.

The takeover leads to competitive overlaps for main-line, regional and local trains as well as for certain components. The only product market where Alstom's and Fiat Ferroviaria's interests would theoretically lead to high market shares is main-line trains, particularly in Great Britain and Spain. However, on both markets the parties had won the relevant contracts jointly in a consortium. Therefore, there is no real addition of market shares. In the EU as a whole, Alstom will become the clear market leader. However, Fiat Ferroviaria's market share has been in decline since 1995, as other competitors are able to offer tilting train technology, eroding its initial advantage of being the first on the market. As regards the other four product markets with overlaps, the addition of market shares was either minimal (for regional trains, propulsion), or several other strong competitors remained (local trains, converters).