European Union antitrust regulators are to probe deeper into Siemens' bid for U.S. oilfield equipment maker Dresser-Rand Group Inc on concerns that the $7.6 billion deal may reduce competition and push up prices.
The move by the European Commission could take the shine off the takeover, one of Siemens' biggest. Chief Executive Joe Kaeser had to defend the deal at the annual company's meeting last month while analysts have questioned the price tag.
The Commission said the merged company would compete only with General Electric in turbo compressors and drivers for trains.
"The transaction would reduce the number of competitors from three main players to two main players in all of these markets. This may lead to less product variety and ultimately higher prices," the EU executive said in a statement.
Reuters was the first to report on Feb. 11 that the EU competition authority would launch a full-scale probe after the companies decided not to offer concessions to allay its concerns.
Siemens, Europe's largest engineering group, declined to comment on the specifics of the case, saying that it still expected to close the transaction in the summer of 2015 or earlier.
The company wants to reinforce its presence in the U.S. shale oil and gas industry through the deal.
The Commission set a June 30 deadline for its decision. Siemens may have to offer concessions to secure approval if it fails to convince the watchdog that its concerns are not significant.
