Hitachi-Thales Deal Could Push Up Fares for Passengers, UK Watchdog Says
09 December 2022 - 7:06PM
Dow Jones News
By Joshua Kirby
Hitachi Ltd.'s planned acquisition of Thales SA's
rail-infrastructure business could lessen competition and drive up
fares in the U.K., the country's financial regulator said Friday,
warning of an in-depth probe of the deal if its concerns aren't
addressed.
The Japanese conglomerate last summer entered talks to buy
Thales's rail-signaling business for an enterprise vale of 1.66
billion euros ($1.75 billion.) The deal between Hitachi and the
French firm could eliminate a credible competitor from the
tendering process for mainline signaling to be held by U.K.
railway-infrastructure operator Network Rail, the country's main
customer for signaling, the Competition & Markets Authority
said.
"The resulting loss of competition across both mainline and
urban signaling markets could increase costs for Network Rail and
Transport for London and have an adverse knock-on effect on
taxpayers and passengers," the regulator said, referring to the
operator of the capital's metro network.
The country's signaling already suffers from a lack of
competition, with the market essentially limited to just two
suppliers, namely Germany's Siemens AG and France's Alstom SA, the
CMA said.
Hitachi now has the opportunity to submit proposals to resolve
the CMA's competition concerns. If it fails to address the
concerns, the deal will face a more thorough phase two
investigation, the CMA said.
Write to Joshua Kirby at joshua.kirby@wsj.com;
@joshualeokirby
(END) Dow Jones Newswires
December 09, 2022 02:51 ET (07:51 GMT)
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