Brussels. The European Commission is expected to block a plan by Siemens AG and Alstom SA to merge their rail units, over concerns that the deal between two rivals would stifle competition in the region’s train-equipment market, according to people familiar with the matter.

Proposed concessions aimed at allaying EU objections — plus a last-minute lobbying campaign from politicians warning of the threat of Chinese rivals — failed to sway Margrethe Vestager, the EU’s antitrust commissioner, said one of the people, who spoke on condition of anonymity. A senior German official who asked not to be named also said he expected a veto.

The decision would be a setback for the manufacturers, which had strong political backing from the French and German governments for their combination and spent months lobbying to get it past regulators. The plan — unveiled in September, 2017 — was to build a European transportation giant out of Siemens’ mobility unit and Alstom, with the idea that it would be able to counter competition from China.

Spokesmen for Siemens and Alstom declined to comment. Ricardo Cardoso, a spokesman for the commission, didn’t immediately respond to a call and email seeking comment.

Yet signs that the deal was in trouble started to emerge in October when the Commission issued a harsher-than-expected statement of objections. The companies offered up a package of businesses to sell to gain the green light, including signalling and fast-train operations, but the day after a crucial meeting with regulators, the writing was on the wall.

The former rivals have said the resulting European rail champion, with combined sales of about 15 billion euros ($17 billion), would be able to fend off competition from China.

“We can’t build those champions by undermining competition,” Vestager said January 9 in Berlin. “We can’t build them with mergers that harm competition, or by looking the other way when Europe’s businesses break our rules.”

Reuters reported earlier on the EU’s position. The deal faces a February 18 EU deadline.

Vestager’s thinly veiled warning followed a last-ditch salvage attempt by Siemens and Alstom executives to make further concessions, Bloomberg News reported. It also came after French Finance Minister Bruno Le Maire gave his own warning, saying any attempt to block the deal would amount to a ‘political mistake.” The French company warned this week that the deal could be blocked.

While Vestager has blocked only three deals since she became commissioner in 2014, EU opposition has forced several other companies to abandon transactions, often after they decided concessions to gain approval would be too painful.

An EU veto can chill deal-making across an industry. Telecoms consolidation in Europe ground to a near halt after regulators EU blocked CK Hutchison Holdings Ltd’s bid to create the U.K.’s biggest mobile phone carrier in 2016. The EU also stopped Deutsche Boerse AG’s planned takeover of London Stock Exchange Group Plc in 2017, days before an EU veto of a Croatian cement deal.

The Siemens and Alstom combination would have given the German company control of an icon of French industry that developed the high-speed TGV trains that zip across the countryside at upwards of 300 kilometres an hour (186 miles per hour). President Emmanuel Macron’s government backed the deal after receiving assurances on jobs, and it comes just days after German Chancellor Angela Merkel was reelected on a platform of closer European ties.

Capping years of speculation in the industry about the need for consolidation, the tie up was to mirror the emergence of European plane maker Airbus in the 1970s that went on to become the biggest competitor to Boeing Co.

Siemens Alstom, as the combined company was to be called, would have had about 62,000 employees and become the second-largest maker of rail cars and locomotives after China’s CRRC Corp Years of bitter rivalry between the European companies created animosity in the past so a deal between them was unexpected. It came alongside the German company’s negotiations to join forces with Canadian competitor Bombardier Inc through two joint ventures.