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Dec 9 (Reuters) – Britain’s competition watchdog is concerned that the acquisition of France’s Thales ( TCFP.PA ) railway signaling business by Japan’s Hitachi ( 6501.T ) could result in higher fares for passengers, it said on Friday.
As a result, Thales ( TCFP.PA ) expects the sale to close in the second half of next year, compared with a previous plan to finalize the deal in early 2023.
Thales shares fell 1.6% to 120.70 euros at 0827 GMT in Paris.
The French technology and infrastructure company cited the CMA’s intention to open a “phase II” review of the deal as the reason for the delay.
The Competition and Markets Authority (CMA) said Britain’s main customer for mainline signalling, Network Rail, is undertaking a tendering process for its next major signaling procurement.
The Office of Rail and Road previously found that mainline signaling in Britain is provided by just two suppliers – Alstom ( ALSO.PA ) and Siemens ( SIEGn.DE ), and said the lack of competition would lead to “an adverse increase” in operators’ costs. “Can do. A knock-on effect on taxpayers and commuters.”
A deal between Hitachi and Thales could remove a credible competitor from the new tendering process, it said.
The deal, first announced in August 2021, values Thales’ division at 1.66 billion euros ($1.75 billion), and Hitachi expects the acquisition to help its rail division reach 1 trillion yen ($7.34 billion) in revenue by 2026.
Since the announcement of the deal, the companies have obtained two-thirds of the required deal approvals, including approval of the merger in nine of the 13 required jurisdictions, Thales said on Friday.
It said both companies are committed to working with all regulatory bodies to close the deal as quickly as possible.
($1 = 0.9462 euros)
($1 = 136.3100 yen)
Reporting by Piotr Lipinski in Gdansk; Editing by Jason Neely and Barbara Lewis
Our Standards: The Thomson Reuters Trust Principles.
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