The EU Commission has approved Siemens’ takeover bid for VA Tech, on condition that the German company sells VA Tech Hydro.
For competitive reasons, the European Antitrust regulators did not approve a merger of the VA Tech hydro power activities with Siemens. As a result, Siemens will immediately initiate the sale of the VA Tech Hydro – in compliance with conditions set by the EU Commission.
The decision follows an in-depth investigation into the takeover, as the Commission had been concerned that the transaction may have impeded effective competition within the European Economic Area.
‘We are in favour of the establishment of strong, competitive companies as long as effective competition is maintained on all the relevant markets,’ said Competition Commissioner Neelie Kroes in a statement. ‘In this particular case, I wanted in particular to be sure that final consumers would not have to pay higher electricity prices passed onto them by suppliers because of more expensive hydro power plants. I am therefore pleased that the commitments given by Siemens allow the Commission to approve this merger.’
Siemens is also required to ensure the independence of metal plant builder SMS Demag if the transaction is to go ahead.