The competition regulator in Britain has stated that the acquisition of Thales’ signaling business by Hitachi, which costs 1.7 billion euros ($1.8 billion), has the potential to increase the expenses associated with upgrading the country’s rail network. To address this issue, the regulator has requested that the companies provide a response.
The Competition and Markets Authority (CMA) identified Hitachi Rail and Thales SA’s Ground Transportation business as major suppliers of railway signaling systems, along with Siemens and Alstom, for both mainline and urban networks.
“We have provisionally found that, should the merger go ahead, it would reduce the number of signaling suppliers in what is already a highly concentrated industry, and the resulting loss of competition could leave transport networks and passengers worse off,” the CMA said on Thursday, reported Reuters.
“We will now consult on our findings and on how Hitachi and Thales might address our concerns, in a way that protects passengers and delivers the government’s objective for a more reliable, efficient and modern railway.”
Hitachi Rail expressed their disappointment with the CMA’s provisional findings and stated that they will carefully assess how to address the concerns raised.