The European Commission has approved, under the EU Merger Regulation, Bouygues' acquisition of Equans.
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The approval is conditional on full compliance with commitments offered by Bouygues.
Bouygues and Equans are both global providers of multi-technical and engineering services for a wide range of sectors. Bouygues, via Colas Rail Belgium, and Equans are among very few providers of electrical engineering services for railway contact lines in Belgium and two of only three providers nationwide.
Railway contact lines are transmission systems for supplying trains with electric power via current collectors, in most cases, through overhead lines suspended above the locomotives.
The merger is also subject to review by the Competition and Markets Authority in the UK, which has also issued a decision on its investigation on 19 July 2022.
Given that the merger combines two of the leading providers of installation and maintenance services for railway contact lines in Belgium, the Commission had concerns that the transaction, as originally notified, would have reduced competition in that market.
The Commission's investigation showed that this market is characterised by significant barriers to entry.
In addition, the merged entity would have very large market shares and only face competition from very few participants in calls for tenders. The Commission was therefore concerned that this would give rise to higher prices for electrical engineering services for railway contact lines in Belgium.
To address the Commission's competition concerns, Bouygues offered to divest Colas Rail Belgium in its entirety, including all assets, personnel and ongoing and future contracts of both its railway contact lines and track installation businesses.
As a result, Colas Rail Belgium will remain an independent competitor to Bouygues and Equans in the relevant market in Belgium.
These commitments fully address the competition concerns identified by the Commission. Feedback received from several customers and competitors in the market test of the proposed commitments confirmed the Commission's view that Colas Rail Belgium constitutes a viable and attractive business that would enable suitable buyers to effectively compete with the merged entity.
The Commission therefore concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in the European Economic Area. The decision is conditional upon full compliance with the commitments. ■