Progress Rail, Caterpillar’s rail division, has begun legal proceedings against its rival Wabtec over its acquisition of General Electric Co. Transportation.
Progress alleged that this acquisition was an anti-competitive move that would allow Wabtec to effectively control parts of the US rail freight market. Wabtec has denied the claims and called the legal proceedings an “unsupported attack”.
Wabtec has “profited and continues to profit, from its unlawful, exclusionary conduct… [that] will make the freight locomotives that drive this country’s economy more expensive, less safe and worse for the environment,” according to lawyers representing Progress.
“That combination merged the sole supplier of certain key freight locomotive inputs (Wabtec) with the dominant supplier of finished freight locomotives and other cab technologies (GE Transportation),” the filing to the US Federal Court in Delaware explained.
“It created a vertically integrated entity with dominant positions in multiple products and the incentive and ability to engage in anticompetitive exclusionary conduct to harm the competitive process and consumers,” the allegation continued.
In a statement, Wabtec said it will “aggressively defend the case in court”.
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Wabtec continued by saying: “We believe that Progress Rail’s recent complaint against Wabtec at its core is an unsupported attack on the merger of Wabtec and GE Transportation, which was completed over four years ago.
“The merger has provided benefits to the entire industry, as well as Progress Rail itself. Progress Rail actively participated in the US Government’s review of that transaction and benefitted by entering into agreements with Wabtec that transferred Wabtec technology to it as part of the United States Department of Justice and global merger clearance process.”
Wabtec’s statement then concluded by saying: “We also firmly believe that Progress Rail’s assertions that Wabtec breached agreements or engaged in other illegal conduct are wrong. We intend to aggressively defend the case in court.”
The aim of the lawsuit is to force Wabtec to divest from GE Transportation and reverse the $11bn deal signed in 2019. Progress Rail has also asked for damages to be paid.