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Siemens steels itself for EU rejection of rail merger with Alstom

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Siemens steels itself for EU rejection of rail merger with Alstom

Siemens steels itself for EU rejection of rail merger with Alstom

Siemens will accept defeat if the EU rejects its pleas to allow it to combine with Alstom to create a powerful Franco-German rail business, it indicated on Wednesday as it announced first quarter results that disappointed investors.

David Pollard reports.


Siemens steels itself for EU rejection of rail merger with Alstom

A merger of Siemens and Alstom's train businesses would create a global rail giant but just like the targets for its industrial business results on Wednesday, it's an ambition even Siemens itself acknowledges it might not achieve.

In a pending decision from the EU.

(SOUNDBITE) (German) SIEMENS CHIEF EXECUTIVE JOE KAESER, SAYING: "It is up to the antitrust authorities to make a decision.

It will be interesting to see if the future of mobility in Europe will be determined by technocrats or future-oriented Europeans." The German firm's customers include Deutsche Bahn and Eurostar.

London Underground recently signed a 1.5 billion euro deal for 94 new trains.

A union with Alstom would mean 15 billion euros in combined revenues.

And a Franco-German powerhouse able, the argument goes, to compete with the biggest - like China's state-owned CRRC.

Though not, says Siemens, at any price.

(SOUNDBITE) (German) SIEMENS CHIEF EXECUTIVE JOE KAESER, SAYING: "It would be good for all participants if the merger succeeded.

However, we won't pursue it at all costs.

And we won't let this make us unsettled." Unsettling for investors: its latest quarterly numbers.

Siemens' shares lost over a per cent on profits that have halved at its Power and Gas business.

Badly hit by collapsing demand for giant turbines as the energy sector shifts towards renewables.

Its merger plans have been badly hit by opposition since they were announced in September 2017.

And could, insiders say, still fail despite concessions made to address anti-trust concerns.

The EU is due to make a ruling by February 18 - but could do so as early as next week.

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