Hitachi Rail is now waiting on just the European Union to approve its €1.66bn ($1.78bn) merger with Thales’ Ground Transportation Systems (GTS) business after getting clearance from the UK’s Competition and Markets Authority (CMA). 

After previously expressing concern about the merger’s impact on the digital signalling market in the country, the CMA approved Hitachi’s offer to sell its existing mainline signalling business in the UK, France and Germany. 

Stuart McIntosh, chair of the CMA’s independent inquiry group, said of the CMA’s other concerns: “Effective signalling is vital for safe and reliable rail travel, which is why it has been important for us to review this merger thoroughly before reaching a final decision.  

“We have concluded that the merger will not reduce competition to provide CBTC signalling systems and in particular those required on the underground network in London.” 

The CMA’s decision on the merger’s lack of impact on the communications-based train control signalling systems market came after the inquiry group concluded that while Thales was an important supplier to the London Underground, Hitachi itself was unlikely to be able to meet Transport for London’s requirements for upcoming CBTC projects. 

The news was welcomed by Hitachi, who has now received approval from 12 of the 13 necessary jurisdictions and said it would continue focusing on gaining clearance from the EU after refiling its merger notice last month, anticipating a final decision on the acquisition in early November. 

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A Hitachi spokesperson said: “We believe strongly in the competitive benefits of the deal to acquire Thales’ GTS, which will deliver value for customers in the rail signalling and mobility sectors in Europe and around the world.” 

Approval from the EU would finally bring the long process of confirming the merger to an end after Hitachi first entered negotiations to buy Thales’ GTS business in August 2021, initially expecting to close on the deal by the end of 2022 or in early 2023.