French Railroad Buys Swiss Equipment Firm

European Union competition regulators Jan. 25 approved the takeover by France's state railway SNCF of Geneva-based Ermewa, a leading railcar and rail container leasing firm.

The EU's approval is conditional on SNCF disposing of Ermewa's European rail grain transportation business because it is concerned the deal would reduce competition in this sector in France, Italy, the Benelux and parts of Germany.

SNCF's logistics and transport unit, TLP, which is taking over Ermewa, must also sell the Swiss firm's operations involving axial hopper wagon hire for cereal transportation.

SNCF did not say how much it is paying for the 51.4 percent of Ermewa that it doesn't already own. Ermewa's other shareholder is Citerne, a Swiss private investor group.

Ermewa reported 2008 earnings of $174 million on revenue of $542 million. It manages a fleet of 21,000 freight railcars and 40,000 tank containers and employs 515 people in 20 countries.

- Bruce Barnard, The Journal of Commerce.