Europe approves acquisition of Faiveley by Wabtec, subject to conditions
Staff Writer |
After an in-depth investigation under the EU Merger Regulation, the European Commission has cleared the proposed acquisition of Faiveley Transport of France by US-based Wabtec.
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The approval is subject to the implementation of commitments. Both companies are significant suppliers of train equipment.
The Commission had concerns that, by eliminating one of only three strong suppliers of sintered friction materials for train brakes, the transaction as initially notified would have led to reduced competition and price increases for these products. To address this concern, the parties will sell Faiveley’s friction materials business Faiveley Transport Gennevilliers.
Sintered train friction materials are materials transformed from powder into a strong substance capable of withstanding high temperatures and pressure. They are key components of many modern train brake systems.
As they are subject to constant wear and tear when the brakes are applied, train operators need to replace them regularly.
The Commission had concerns that the transaction, as initially notified, would have reduced competition in the aftermarket for sintered train friction brake materials, where train operators purchase them for their existing train fleets.
This is because the merger would eliminate one of only three strong suppliers in this market. The presence of a single remaining competitor would have been insufficient to maintain adequate competition.
The Commission initially had additional concerns, relating to a number of other types of train equipment, including friction brake systems and pantographs. However, following its in-depth investigation, the Commission concluded that those concerns were not substantiated
To address the Commission’s competition concerns, the parties offered to sell in its entirety Faiveley Transport’s sintered friction material business, Faiveley Transport Gennevilliers. The company specialises in the development and production of sintered friction materials for various purposes, including train brakes.
The divestment will remove all overlap between Faiveley and Wabtec in sintered train friction brake materials. The Commission's decision to approve the transaction is conditional upon full compliance with the commitments. ■
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