Dec 9 Reuters Britain39;s competition watchdog is concerned Japan39;s Hitachi acquisition of France39;s Thales railway signalling business may result in higher fares for passengers, it said on Friday.

As a result, Thales expects the sale to close in the second half of next year, compared to the previous plan to finalise the deal in early 2023.

Thales shares slipped 1.6 in Paris to 120.70 euros at 0827 GMT.

The French technology and infrastructure company cited the CMA39;s intention to open a phase II review of the deal as reason for the delay.

Britain39;s principal customer for mainline signalling, Network Rail, is putting in place a tendering process for its next major signalling procurement, the Competition and Markets Authority CMA said.

The Office of Rail and Road found earlier that mainline signalling in Britain was provided by only two suppliers Alstom and Siemens, and it said that lack of competition could increase operators39; costs with an adverse knockon effect on taxpayers and passengers.

A deal between Hitachi and Thales could eliminate a credible competitor from the new tendering process, it said.

The deal, first announced in August 2021, values Thales39; division at 1.66 billion euros 1.75 billion and Hitachi expects the acquisition to help its rail division reach revenue of 1 trillion yen 7.34 billion by 2026.

Since the deal announcement, the companies have secured twothirds of the needed deal approvals, including merger clearances in nine out of…