Now that the European Commission has approved Siemens’ USD 2.8 billion takeover of Invensys Rail, we can properly assess the potential of this deal and its impact on railway signalling overall. We should point out that this is very much a personal opinion on the acquisition, and in no way reflects the views of anyone in either company.
Over the past 13 years I’ve reported on signalling developments and projects from both companies and seen their strengths in operation first hand. Siemens and Invensys Rail share a policy of innovation, technical excellence and have consistently delivered on their promises. And I think that Siemens’ acquisition of Invensys Rail is a very good move for both companies for three reasons.
Firstly, Invensys Rail’s product portfolio complements Siemens very neatly. The company’s interlockings, CBTC and ERTMS offerings have very little overlap with those of Siemens, filling slightly different niches and needs. Its LYRA ERTMS onboard equipment, for example, represents a genuine breakthrough in minimising the space required for retro-fitment in particular, and its range of interlocking equipment is future-proof, service proven and extremely reliable – to name two high-profile examples.
Secondly, the markets each company serves are different. Invensys Rail has historically been particularly strong in the United Kingdom, Spain and Australasia – and has made huge inroads into the increasingly lucrative Middle Eastern region. Of course Siemens has a presence in these regions but it won’t be cannibalising its own biggest markets.
Finally, Siemens will give Invensys Rail’s products the global scale and reach to bring their undoubted benefits to many more countries. With Siemens’ operations worldwide it will be more feasible than ever to establish Invensys Rail’s best products without the cost of setting up new offices and bid teams.
The details of how Siemens will integrate Invensys Rail are – obviously – unclear at this early stage, but given the harmony between the two companies’ ranges, it’s almost impossible to conclude other than that the signalling sector, and railways all over the world could benefit hugely from the acquisition.