The deal was supposed to create the “Airbus of rail” — a mega-merger bringing together parts of France’s Alstom and Siemens of Germany. In 2017, Alstom’s then CEO pitched it as a chance to create a “European champion”. But European regulators nixed the proposal, seemingly sounding a death knell for attempts by the continent’s largest companies to combine forces to compete with the US and China.

Now the idea is back. The EU unveiled new merger guidelines this year designed to ease the way for corporate tie-ups. “We need European champions,” Commission president Ursula von der Leyen said this year. The FT conducted an anonymous survey of more than 30 leading M&A banks, law and PR firms and executives asking which companies they would merge to create best-in-class European champions in strategic sectors ranging from tech to defence to energy.

The answers, which range from long-rumoured or previously tried deals to very creative and borderline crazy suggestions, illustrate both the potential and the extraordinary complexity of corporate tie-ups as a means to make Europe more competitive. EU economic growth over the past decade has trailed behind the US and China, with the EU’s average annual real GDP increase of 1.3 per cent to 1.5 per cent behind the US’s 2.2 per cent and China’s 5 per cent. While Washington has unleashed aggressive trade policies and its tech sector dominates innovation such as AI, China is pursuing long-term industrial and raw materials expansion, with its companies challenging traditional European strongholds such as carmakers, renewables and chemicals.

Against this backdrop of rising competition and persistently weak economic growth, Paris and Berlin have pushed Brussels to rethink the way the bloc polices mergers to give them the size and scale they need to thrive. The merger guidelines presented in April reflect calls for more M&A openness, stressing the importance of considering scale, innovation and resilience when examining deals to allow the region’s companies to better compete globally. At present, strategic sectors such as telecommunications, defence, energy and banking are largely fragmented across the continent.

Putting some of them together through mergers, the argument goes, would give European companies sufficient scale to better compete globally with larger balance sheets, greater purchasing power, bigger research and investment budgets, potential cost savings and higher profits. Europe’s telecoms industry currently has about 40 large companies in the region. Operators have long argued that the scale and market fragmentation hinder investments in technology and infrastructure.

In the survey, Germany’s Deutsche Telekom is mentioned most often as the company to lead such consolidation with the likes of Orange in France or Spain’s Telefónica. A German-Franco deal would create a company that serves more than 16 European markets with mobile services, while allowing the companies to combine backroom teams and infrastructures to drive efficiencies and invest further in improved technology such as 6G.