The European Commission has blocked a merger between two major rail companies based in the EU.

German company Siemens had proposed acquiring the French rail transport firm Alstom.

The deal would have brought together the largest supplies of multiple types of railway and metro signalling systems.

Euronews reports the merger would have seen the companies on a €15 billion annual turnover.

However, following an investigation, the European Commission today announced it is prohibiting the merger.

The Commission said it was seriously concerned the acquisition would significantly impede effective competition in the area of signalling systems and very high-speed trains (ones which operate at 300km/h or more).

Image: European Commission

Commissioner Margrethe Vestager, who's in charge of competition policy, said: "Millions of passengers across Europe rely every day on modern and safe trains. Siemens and Alstom are both champions in the rail industry.

"Without sufficient remedies, this merger would have resulted in higher prices for the signalling systems that keep passengers safe and for the next generations of very high-speed trains. The Commission prohibited the merger because the companies were not willing to address our serious competition concerns."

In a statement, both firms said they regret that the "remedies they offered" were insufficient.

They said: "The remedies were extensive in scope and addressed all the concerns raised by the Commission with respect to signaling as well as very high-speed trains.

"In addition, a number of credible and well-established European players expressed strong interest in the remedy package, thereby fully confirming its viability."

French and German ministers, meanwhile, claimed the move demonstrates the need for EU competition rules to be looked at again - saying there's an urgent need for a 'European Industrial Strategy' to compete with the rest of the world.