Siemens, Alstom aim to create "European champion" with rail production merger

Credit Alstom

Alstom Chief Executive Henri Poupart-Lafarge on Wednesday expressed confidence that the deal would receive antitrust approval. Customers will significantly benefit from a well-balanced larger geographic footprint, a comprehensive portfolio offering and significant investment into digital services. Alstom is strong in Africa, India, Central and South America, while Siemens is strong in China, Europe and the USA, he added.

"They lost out this time but there's presumably going to be more consolidation", he said, noting competitors of varying sizes remain around the world.

The board of directors of the new group will consist of 11 members.

Though Alstom is of a similar size to the rail division of Munich-based Siemens, with annual sales of more than 7 billion euros ($8.20 billion), the German business is part of a group that ranks as Europe's largest manufacturer with nearly 80 billion euros ($93.76 billion) in revenue and a product range spanning power grids and building controls to medical scanners, washing machines and wind turbines.

Alstom and Siemens, Europe's leading train manufacturers, have agreed to join forces. Jochen Eickholt, CEO of Siemens Mobility, shall assume an important responsibility in the merged entity.


The CEOs of Siemens and Alstom will hold a joint press conference in Paris at 0930 GMT on Wednesday. The French government owns 20 percent of Alstom and intervened repeatedly in the past to protect the struggling maker of high-speed TGVs and its jobs.

The new European company with 62,300 employees in more than 60 countries will have an order backlog of US$72 billion and an adjusted margin of eight per cent.

The French government acquired its option on the Bouygues stake as part of a deal that helped Alstom reject Siemens as a buyer for the power business in favour of GE.

Siemens and Alstom announced they have signed a Memorandum of Understanding to merge their rail traction drives businesses. If Alstom were not to pursue the transaction, it would have to pay a €140 million ($164.14 million) break-fee.

The deal is expected to be closed at the end of 2018, subject to clearance from regulatory authorities confirming that no mandatory takeover has been initiated. It is estimated that synergies will be of 554,2 million U.S. $for four years after the closing of the transaction.

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