Assessing the practical implications of the Foreign Subsidies Regulation – revisiting the acquisition of Vossloh Locomotives by CRRC

Abstract

The EU Foreign Subsidies Regulation became applicable last year. To assess its potential impact, this article explores what might have happened had the Regulation been applied to the acquisition of Vossloh Locomotives by CRRC, the Chinese state-owned supplier of rolling stock equipment. The Bundeskartellamt cleared the merger in 2020, even though it concluded that CRRC had ‘theoretically unlimited access’ to subsidies. This article highlights how, from an economics perspective, the assessment might have been different under the FSR, with the potential to lead to a different outcome.