Alstom SA warned a planned merger with Siemens AG’s rail business could be blocked by the European Commission because improvements on a package of assets proposed for sale may not be enough to dispel antitrust worries.

There is “no certainty that the content of this package will be sufficient to alleviate the concerns of the commission,” the French train-equipment maker said Thursday in a statement on nine-month sales and orders, which stand at a record.

The companies’ attempt to make the deal more palatable to regulators was submitted on Dec. 12 and then improved amid talks with the commission, Alstom said. The assets proposed for disposal, mainly rolling stock and signaling activities making up about 4 percent of sales of the planned new company,“is appropriate and adequate.”

Alstom shares rose 0.3 percent in Paris while Siemens stock fell 0.8 percent in Frankfurt.

A collapse of the deal would be a significant setback for the German and French former rivals who have said the resulting European rail champion would be able to fend off competition from China. With combined sales of about 15 billion euros ($17 billion), the planned entity has support from Germany and France, although opposition has been growing in recent weeks.

Public Criticism

Rail network operators called on the commission to veto the deal, while several member country competition authorities took the rare step of publicly criticizing the companies’ concessions as insufficient.

Siemens and Alstom were said to be considering adding sweeteners to their package of assets for sale in a last-ditch effort to gain antitrust approval from the commission, Bloomberg News reported Wednesday. The German and French train equipment suppliers’ new offerings include possible contract extensions and patents and were being discussed with antitrust officials and potential bidders.

Click here for: Siemens, Alstom Said to Mount Last-Ditch Effort to Save Deal (2)

The French government on Wednesday continued to put pressure on the commission not to scuttle the plan, which has to be decided on by Feb. 18.

“It would be a political mistake and an economic error,” Benjamin Griveaux said at his weekly press conference in Paris. “It would also send a bad message to the people of Europe” because the block of countries has so far “failed to protect its people” in the face of global competition.

Alstom on Thursday also reported nine-month orders and sales:

  • Third-quarter order intake was 3.39 billion euros vs 1.68 billion euros a year earlier
  • Quarterly sales rise 10 percent
  • Order backlog 39.7 billion euros on Dec. 31
  • Confirms full-year objectives