Independent Party to Assess Which HS2 Bid Goes Ahead Unblocking Acquisition

THE STALLED acquisition by French industrial group, Bouygues, of global business Equans S.A.S. from ENGIE has been moved on with a proposal for one of the companies to withdraw its High Speed 2 bids, unblocking the proposed acquisition.

The merger, valued at around £6 billion bps, was blocked by the Competition and Markets Authority (CMA) on 19 July 2022, because it could result in a ‘substantial lessening of competition’ in relation to the supply of high-speed overhead catenary systems (OCS) to the HS2 project.

The CMA allowed the companies to offer a proposal which would review the current OCS tender.

Bouygues had submitted a bid through its subsidiary Colas Rail Limited, while Equans also submitted a bid through a consortium (Rapide JV) made up of its subsidiaries: SPL Powerlines UK Limited, Ineo SCLE Ferroviaire SNC, and Keltbray Rail Limited.

The tenders were being considered by HS2 and were two of only a very limited number of tenderers received.

CMA Concerns

If the acquisition went ahead, CMA was concerned that it could result in the merged companies exercising control over two separate tenders for HS2 Ltd, which could soften competition.

On the other hand, if the merged company withdrew one of its bids, CMA was concerned it could result in the number of tenderers being reduced, stifling the competitive process. It could also “result in a higher-cost final [HS2] contract, which would have an adverse knock-on effect on taxpayers,” the regulator added.

Unblocking Acquisition

It was agreed that an independent third-party expert was appointed to assess which of the Colas Rail and Rapide JV tenders is more economically advantageous to HS2 Ltd, and which bid should be withdrawn.

On 30 August the CMA said Bouygues and ENGIE have proposed to appoint Ingerop, a French independent engineering company, to make the decision of which bid should go ahead.

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