Compass Lexecon Assists in Merger of Long-Haul Freight Locomotive Manufacturers

In May 2018, Wabtec Corporation, a manufacturer of railroad components, announced plans to acquire General Electric’s Transportation division, which manufactures locomotives and other transportation products, for $11 billion. Compass Lexecon experts Jonathan Orszag and Daniel O’Brien were retained by counsel for Wabtec and GE Transportation to provide economic analysis concerning the merger and to assist the companies with the U.S. Department of Justice’s review of the deal. Wabtec is the largest supplier of components used to manufacture long-haul freight locomotives, and GE Transportation is one of two manufacturers of long-haul freight locomotives in the United States. Compass Lexecon provided economic analysis showing that the merger does not raise significant vertical foreclosure concerns in the market for long-haul locomotives because locomotive manufacturers have credible threats to seek alternative sources of supply for locomotive components.

The Compass Lexecon team based in Washington, DC also included John Hore, Rodrigo Montes, Alyson Matthews and John Hassett. Compass Lexecon worked closely with Wabtec’s outside counsel, Jones Day, led by Craig A. Waldman, Jeremy P. Morrison and Peter A. Julian, and GE Transportation’s outside counsel, Arnold & Porter Kaye Scholer LLP, led by Jonathan Gleklen, Matthew Shultz and Emily Blackburn.