Just over a year after European regulators rejected a merger between Alstom of France and Siemens of Germany that would have created a rail-equipment powerhouse, Alstom is going back to Brussels with a new partner and a new deal — and this one is more likely to pass muster, according to experts in EU competition law.

Alstom is buying the rail division of Bombardier of Canada for around €6 billion in cash and stock, according to a memorandum of agreement signed late Monday. The acquisition, if approved, will consolidate Alstom's position as the second-largest rail equipment company in the world by revenue, after CRRC Corp. of China and ahead of Siemens, according to data from SCI Verkehr, a research concern specializing in transportation.

The Alstom-Bombardier deal differs in size, scope and structure from the proposed merger of Alstom and Siemens, which the EU's competition directorate prohibited on Feb. 9, 2019, under the EU Merger Regulation.

It also comes at a time of increased reflection, partly because of that failed deal, on whether EU competition regulation should evolve to facilitate the creation of more European industrial champions in the face of increased competition in world markets.

These micro and macro differences may increase the likelihood that DG Competition, the antitrust arm of the European Commission, will bless the Alstom-Bombardier deal, competition lawyers told Law.com International.

Antoine Winckler, a Brussels-based competition partner at Cleary Gottlieb Steen & Hamilton, which advises Alstom, noted two elements that were a factor in the rejection of the Siemens deal that loom less large with Bombardier.

First, a combination with Bombardier, currently No. 4 in global sales of rail equipment, will be smaller than a combination with Siemens, the No. 3 firm, which some analysts estimated would have 70% or more of the global market for rail equipment — a level of concentration the EU regulators deemed harmful to competition.

Second, the size difference between Alstom and Bombardier, and the fact that the deal is an acquisition rather than a merger of equals, makes it potentially less complicated to negotiate any remedies that regulators might require.

As an example, Alstom and Siemens, the makers of the TGV and the Velaro, consider their high-speed train units untouchable "crown jewels," Winckler said.  Bombardier, by contrast, is a limited player in that market, mainly through joint ventures. Bombardier is also a small player in the critical area of signaling systems — the software and microelectronics that keep trains safe and running smoothly — where Alstom and Siemens have large presences.

With Bombardier and Alstom, "there are many complementarities and relatively few overlaps," Winckler said.

As the Alstom-Bombardier deal moves through the EU approval process, it may actually benefit from the failure of the Siemens deal, which accelerated a conversation in Europe on how competition rules should be applied.

The French, German, Italian and Polish governments wrote jointly this month to the EU competition commissioner, Margrethe Vestager, to push for changes that could bolster alliances in industries deemed at risk from competition outside the 27-nation bloc, notably from China.

Vestager acknowledged their concerns. "We are aware that markets change, that competition from China is intensifying, and that our rules, which are more than 22 years old, must evolve as a result," she said in a press briefing Feb. 9.

An expert on competition law told Law.com International, speaking on condition of anonymity to protect client confidentiality, that "EU rules say nothing that would prohibit creation of an industry champion, and in fact, champions have been created.

"The rules are unlikely to change," the expert continued. "But how market is defined, how long a time horizon should be considered when assessing competitive threat — all of these and more are being discussed."

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