The European Commission (Commission) announced that it has approved the transaction for the acquisition of Thales' Ground Transportation Systems (Thales GTS) business by Hitachi Rail, subject to compliance with the commitments.

The Commission firstly noted that Hitachi Rail and Thales GTS are the leading suppliers of railway mainline signalling services in the European Economic Area (EEA), and that the transaction would restrict competition in the markets for rail mainline signalling projects (including interlockings, overlay and re-signalling projects) in France and Germany by leading to high prices and loss of innovation. The Commission also emphasized that the transaction would bring two close competitors together, resulting in an entity with a very high market share in the relevant markets.

Addressingthe Commission's competition concerns, Hitachi Rail submitted acommitmentproposal.Accordingly, Hitachi Rail proposed to divest its main line signalling platforms in France and Germany, for interlocking, overlay and re-signalling projects. The Commission stated that these commitments would protect competition by removing the horizontal overlap between the parties in the markets for interlocking and automated train protection wayside systems for mainline signaling platforms in France and Germany; and concluded that the transaction, as modified by the commitments, would no longer raise competition concerns.

Consequently, the Commission authorized the acquisition subject to full compliance with the commitmentsthat are made binding.

(European Commission - 30.10.2023)

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