Hitachi committed to divesting its mainline signalling businesses in France, Germany and the UK to receive merger approval. Credit: Luke MacGregor/Bloomberg via Getty Images.

Hitachi Rail has finally secured clearance from the EU for its acquisition of Thales’ Ground Transportation Systems (GTS) business after refiling its merger notice in September.

The EU’s approval was largely expected following the UK’s Competition and Markets Authority (CMA) giving the go-ahead earlier in October, leaving the EU as the last holdout on the buyout.

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As a result of the merger approval, Hitachi will now divest its mainline signalling businesses in France, Germany and the UK, a decision it made to appease fears that the acquisition of Thales GTS could limit competition in the industry.

The EU’s final decision said that the divestiture of the businesses would no longer raise competition concerns by removing the horizontal overlap between the two companies in France and Germany.

The European Commission’s Commissioner Didier Reynders, in charge of competition policy, said: “Hitachi and Thales are close competitors in mainline signalling, notably in France and Germany.

“The divestiture of their activities in these countries will preserve competition and ensure that infrastructure managers and ultimately customers, do not face increased prices, lower quality and less innovation.” 

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The €1.66bn ($1.78bn) merger was first announced in 2021 but faced hurdles around the concerns about its effect on the European signalling market, which led Hitachi to withdraw its original notice and refile in September. 

After receiving approval from the UK’s CMA, Hitachi Rail said: “We believe strongly in the competitive benefits of the deal to acquire Thales’ Ground Transportation Systems, which will deliver value for customers in the rail signalling and mobility sectors in Europe and around the world.”