Exclusive-Hitachi offers to sell assets to win EU okay for Thales rail deal

2 months ago 78

Logo of Hitachi is seen in Zurich

The logo of Hitachi is seen at an office building in Zurich, Switzerland September 10, 2020. REUTERS/Arnd Wiegmann Acquire Licensing Rights

BRUSSELS, Sept 15 (Reuters) - Hitachi (6501.T) has offered to sell assets in France and Germany as well as its core train control technology to gain EU antitrust approval for its 1.7 billion euro ($1.8 billion) buy of Thales' (TCFP.PA) GTS railway signalling business, a person with direct knowledge of the matter said on Friday.

The Japanese conglomerate put in its offer to the European Commission on Thursday, the same day it requested EU clearance for the deal, an EU regulatory filing showed on Friday.

The remedies are similar to those offered to the UK Competition and Markets Authority in June which consisted of the divestment of its UK, French and German mainline signalling business and its core communication-based train control technology to a rival.

Hitachi said then that the package comprised all the elements needed for a viable, standalone business.

The EU competition enforcer, which set a Nov. 6 deadline for its decision, did not provide details of the remedies in line with its policy. It is expected to seek feedback from Hitachi customers and rivals before deciding whether to accept the remedies or demand more.

Hitachi's decision to offer remedies at the same time as it formally filed for approval suggests that the company may have indications that the package may be sufficient to help it win EU clearance.

The company had sought EU approval in October last year but withdrew its application a month later.

The deal underscores the consolidation in the rail industry, with independent players teaming up with bigger industrial groups.

The Competition and Markets Authority (CMA) in August narrowed its concerns, saying the deal would not substantially lessen competition in the supply of communications-based train control signalling systems in the UK. A final report is due by Oct. 6.

It had previously warned that the deal between two leading suppliers of signalling for mainline and urban railway networks could jack up the costs of upgrading Britain's rail network.

($1 = 0.9373 euros)

Reporting by Foo Yun Chee; editing by David Evans and Louise Heavens

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An agenda-setting and market-moving journalist, Foo Yun Chee is a 20-year veteran at Reuters. Her stories on high profile mergers have pushed up the European telecoms index, lifted companies' shares and helped investors decide on their move. Her knowledge and experience of European antitrust laws and developments helped her broke stories on Microsoft, Google, Amazon, numerous market-moving mergers and antitrust investigations. She has previously reported on Greek politics and companies, when Greece's entry into the eurozone meant it punched above its weight on the international stage, as well as Dutch corporate giants and the quirks of Dutch society and culture that never fail to charm readers.

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