HTHIY Hitachi Ltd (PK)

By Pierre Bertrand

The U.K.'s competition watchdog said on Thursday that Hitachi's proposed acquisition of Thales's transportation-systems business could affect costs and quality of service for passengers.

The U.K. regulator, the Competition and Markets Authority, has provisionally concluded that the deal "could lead to a substantial lessening of competition in the supply of digital mainline and urban signaling rail systems."

The deal could lead to reduced choice for Network Rail and Transport for London, the CMA said in a statement.

"We have provisionally found that, should the Merger go ahead, it would reduce the number of signalling suppliers in what is already a highly concentrated industry, and the resulting loss of competition could leave transport networks and passengers worse off," Stuart McIntosh, the CMA's independent inquiry group chair, said.

The CMA said that it will now consult on potential remedies, possibly ranging from requiring Hitachi or Thales to sell parts of their existing businesses to prohibiting the merger altogether, in order to guarantee competition in the supply of both digital mainline and urban signaling is protected in the U.K.

Write to Pierre Bertrand at pierre.bertrand@wsj.com

(END) Dow Jones Newswires

June 08, 2023 03:11 ET (07:11 GMT)

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