European Union (EU) antitrust authorities will reportedly approve Alstom’s acquisition of Bombardier Transportation.
Reuters reported that people familiar with the deal stated that the company will receive the approval to purchase the rail business.
In February, Bombardier and Caisse de dépôt et placement du Québec (CDPQ) signed a memorandum of understanding (MoU) to sell the former’s rail business to Alstom.
This acquisition will make Alstom the second largest manufacturers after China’s CRRC Corporation.
Alstom formally notified the European Commission (EC) regarding the transaction on 11 June.
Earlier this month, Alstom announced plans to carry out divestments of products and factories ahead of the acquisition.
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This move is expected to aid in obtaining regulatory approval from the EU for the planned acquisition.
The divestments planned by Alstom are expected to respond to the potential concerns of the EC.
The EC expressed concerns regarding the French rolling stock manufacturer’s larger market presence after the acquisition.
Alstom planned to transfer the contribution of Bombardier Transportation to the V300 ZEFIRO very high-speed train.
It will also divest Alstom Coradia Polyvalent, the Reichshoffen production site in France, the Bombardier TALENT 3 platform, and production facilities within the site in Hennigsdorf, Germany.
The authority is expected to provide its result by 31 July.
In February 2019, EC blocked the proposed merger of Siemens and Alstom mobility businesses, preventing the creation of a European rail business leader.
In a statement, the EU said that the merger would have created a dominant player in the industry, affecting the railway signalling systems and high-speed train manufacturing markets.
Earlier this month, Alstom acquired Ibre, a specialist in the development, manufacture and supply of cast iron or steel brake discs.