The Competition and Markets Authority (CMA) has updated its provisional findings of Hitachi’s €1.7bn proposed acquisition of Thales’ Ground Transportation (GTS) business, finding that the group’s acquisition will not affect future projects on the London Underground.

The CMA published its phase two findings in June, which raised competition concerns in relation to both digital mainline and urban signalling rail systems, specifically about updates on the London Underground. The publication initiated a period in which the CMA invited responses to the findings from interested parties and continued to gather further evidence.

Following new evidence, together with the range of previously gathered information, the independent CMA inquiry group has provisionally concluded that the merger would not lead to a substantial lessening of competition (SLC) in the supply of communications-based train control (CBTC) signalling systems in the UK.

Transport for London (TfL) is the main customer for CBTC signalling systems in the UK, with Thales and Siemens as its current suppliers.

The CMA’s assessment focused on the likely competition to resignal the Bakerloo and Piccadilly lines. In the original findings, the group considered evidence which suggested that Hitachi was one of a limited number of suppliers with the capabilities to challenger Thales and Siemens in these future tenders.

Hitachi has not previously supplied signalling systems to the London Underground and therefore is “not a credible bidder” for any projects in the future.

Therefore, the inquiry group found that the merger would not result in a substantial lessening of competition in the market.

Chair of the independent inquiry group, Scott McIntosh, said: “Effective competition in the urban and digital mainline signalling markets is essential for ensuring the UK’s rail transport systems are efficient and reliable for passengers who rely on these services.

“Having reviewed the additional evidence, which indicates that Hitachi is unlikely to be a credible bidder for signalling projects on the London Underground in the foreseeable future, we have provisionally concluded that the merger would not harm competition in the supply of these systems in the UK.

“That said, our provisional view that this merger raises concerns in the supply of digital mainline signalling in Great Britain, is not affected by today’s announcement.”

The investigation is to continue, with the final report set to be published by 6 October 2023.

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