Siemens and Alstom announced they have signed a Memorandum of Understanding to merge their rail traction drives businesses. The new company will be listed on the French stock exchange, with 50% of the shares of the new entity to be owned by Siemens.
The corporate name of the combined group will be Siemens Alstom and the group headquarters is expected to be in the Paris area of France. The business headquarters for Mobility Solutions will be in Berlin, Germany, and the business headquarters for Rolling Stock will also be in France.
The board of directors of the combined group will consist of 11 members and will be comprised of six directors designated by Siemens — one of which being the chairman — four independent directors and the CEO. To ensure management continuity, Henri Poupart-Lafarge will continue to lead the company as CEO and will be a board member. Jochen Eickholt, CEO of Siemens Mobility, will assume an important responsibility in the merged entity, the company said.
“This Franco-German merger of equals sends a strong signal in many ways,” said Joe Kaeser, president and CEO of Siemens AG. “We put the European idea to work and together with our friends at Alstom, we are creating a new European champion in the rail industry for the long term.
“This will give our customers around the world a more innovative and more competitive portfolioThe global marketplace has changed significantly over the last few years. A dominant player in Asia has changed global market dynamics and digitalization will impact the future of mobility. Together, we can offer more choices and will be driving this transformation for our customers, employees and shareholders in a responsible and sustainable way.”
It has been reported in Europe that the motivation for the merger has primarily been pressure from Chinese competition.
“Today is a key moment in Alstom’s history, confirming its position as the platform for the rail sector consolidation,” said Alstom’s Poupart-Lafarge. “Mobility is at the heart of today’s world challenges. Future modes of transportation are bound to be clean and competitive. Thanks to its global reach across all continents, its scale, its technological know-how and its unique positioning on digital transportation, the combination of Alstom and Siemens Mobility will bring to its customers and ultimately to all citizens smarter and more efficient systems to meet mobility challenges of cities and countries.
“By combining Siemens Mobility’s experienced teams, complementary geographies and innovative expertise with ours, the new entity will create value for customers, employees and shareholders. I am particularly proud to lead the creation of such a group which will undoubtedly shape the future of mobility.”
The new Siemens Alstom will reportedly benefit from an order backlog of €61.2 billion, revenue of €15.3 billion, an adjusted EBIT of €1.2 billion and an adjusted EBIT-margin of 8.0%. In total, the new entity will have 62 300 employees in over 60 countries.
The transaction is subject to clearance from relevant regulatory authorities, including foreign investment clearance in France and antitrust authorities as well as the confirmation by the French capital market authority (AMF) that no mandatory takeover offer must be launched by Siemens following completion of the contribution. Closing is expected at the end of calendar year 2018.