Siemens take-over of VA tech under investigation

The Commission’s initial market investigation has found that the proposed acquisition may create significant competition problems given the two companies’ horizontal overlaps and vertical links in markets such as hydro power equipment, electricity transmission & distribution equipment, rail transport equipment metallurgical plant building, infrastructure and building technology. Siemens has launched a public take-over bid for VA Tech, which is listed on the Vienna stock exchange. The decision to open an in-depth inquiry does not prejudge the final result of the investigation. The Commission now has four months to take a final decision on whether the concentration would significantly impede effective competition within the Single Market. “This takeover is in a strategically important sector for the EU economy”, commented Competition Commissioner Neelie Kroes. “It is therefore crucial that the Commission verifies that effective competition will be preserved in all the markets concerned”. Both Siemens and VA Tech are active worldwide in a range of similar businesses . Their products are used in areas such as power plants, high-voltage transmission lines, locomotives, steel plants and large buildings.. In respect of a number of products, both firms are not only direct competitors, but are also among the leading companies in Europe and worldwide. The Commission has therefore opened a second phase investigation in order to carry out an in-depth assessment of the proposed transaction. It now has four months to investigate whether the proposed acquisition will significantly lessen effective competition in the European Union and the EFTA markets. Siemens is a diversified technology group with activities in the following main business areas: information and communication, automation and control, energy supply, transport, lighting technique and medical equipment. VA Tech, headquartered in Linz, is Austria’s largest industrial group, with €4.3 billion annual turnover and some 17,000 employees. Its four main business areas cover power generation, power transmission and distribution, metallurgy and electrical plant building and infrastructure. This information was announced on the EU Commission's website.