CMA Raises Concern On Deal Between Hitachi And Thales

(RTTNews) - The Competition and Markets Authority or the CMA in the UK has found that Hitachi's (HTHIF.PK, HTHIY.PK) anticipated purchase of Thales' rail infrastructure business could lead to higher fares in future. The CMA is concerned that the deal could eliminate a credible competitor from the new tendering process for mainline signalling, just when both firms are expected to offer much-needed additional competition.

Colin Raftery, Senior Mergers Director at the CMA, said: "This deal involves two of the main competitors for future mainline rail and urban metro signalling projects, so the loss of competition could risk higher costs and lower quality services, which would ultimately come at the expense of taxpayers and passengers."

Hitachi announced the deal to acquire the Thales Ground Transportation Business in August 2021. The CMA stated that Hitachi now has an opportunity to submit proposals to resolve the CMA's concerns or the deal will face a more thorough phase 2 investigation.