Siemens and Alstom will not offer any further concessions to European regulators over plans to merge their rail operations that have caused concern among EU and national competition authorities.

The proposed merger aims to create a European champion to compete against China’s CRRC, the world’s biggest trainmaker. The respective French and German governments are in favour but Brussels stated its objections in late October and has been unusually vocal since then.

Siemens and Alstom submitted a remedy package in mid-December. However, rivals, regulators and five national competition authorities including Germany’s have backed the commission’s position that it is insufficient. 

Recent reports suggested Siemens and Alstom were working on additional concessions to EU regulators so that the deal would be approved before a February 18 deadline, but people familiar with the details of the negotiation said this was not the case.

The feeling at the two companies is that Brussels has set the bar so high that it cannot be overcome without negating the commercial rationale for the deal. 

For instance, one person said, Brussels is concerned that Siemens-Alstom would dominate the market for very high speed trains in Europe, which hardly exists with no tenders in the pipeline. A report from the EU’s spending watchdog last year said there was “no realistic long term EU plan for high speed rail”.

The last very high-speed train deal won by Siemens was a €600m contract to build 10 Eurostar trains almost a decade ago.

EU competition commissioner, Margrethe Vestager, has also rejected arguments from Siemens and Alstom that the merger is necessary to fend off competition from CRRC.

Alstom, which published third-quarter earnings on Thursday, said it has been in “continuous dialogue” to address concerns about the merger.

“The proposed remedies include mainly signalling activities as well as rolling stock products and represent around four per cent of the sales of the combined entity,” Alstom said. “The parties consider that the proposed remedy package is appropriate and adequate.”

If the merger fails, Siemens still has the best signalling business in the world, it said.

The deal was first proposed in September 2017, just days after Germany’s far-right Alternative for Germany ascended to parliament. 

At the time, chief executive Joe Kaeser said: “The message of the merger is clear: the European spirit is alive”.

That’s a powerful message in times which are marked by populism, by nationalism, by social and political divides, and by self-centred leadership.” 

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