The European Commission said on Wednesday that it has prohibited Siemens' proposed acquisition of Alstom under the European Union (EU) Merger Regulation, because the merger would have harmed competition in markets for railway signalling systems and very high-speed trains.

The takeover would have combined Siemens' and Alstom's transport equipment and service activities in a new company fully controlled by Siemens. It would have brought together the two largest suppliers of various types of railway and metro signalling systems, as well as of rolling stock in Europe, both also with leading positions globally.

The executive branch of the EU said the merger would have created the undisputed market leader in some signalling markets and a dominant player in very high-speed trains.

It would have significantly reduced competition in both these areas, depriving customers, including train operators and rail infrastructure managers, of a choice of suppliers and products, said the Commission.

The Commission received several complaints during its in-depth investigation, from customers, competitors, industry associations and trade unions. It also received negative comments from several National Competition Authorities in the European Economic Area.

Stakeholders were worried that the proposed transaction would significantly harm competition and reduce innovation in signalling systems and very high-speed rolling stock, leading to the foreclosure of smaller competitors and to higher prices and less choice for customers, said the European Commission.