It is made of. The rail manufacturers French Alstom and German Siemens have announced this Tuesday in a joint press release “signing of a memorandum of agreement that guarantees exclusivity to reconcile their mobility activities in a merger of equals,” even if the German takes in the facts, the control of the new set. Indeed, the group will be rated in France with its headquarters in the paris region, while the direction of the group will be ensured by the chairman and CEO of Alstom Henri Poupart-Lafarge. So far, Siemens has a 50% of the capital of the new entity and control the board of directors dpuisque on the 11 members that will comprise the combined company, six will be appointed by Siemens, including the President. There will be four independent directors and the director-general. Jochen Eickholt, the current ceo of Siemens Mobility, should assume an important responsibility in the new entity. The name of this new entity will be Siemens, Alstom.
The French State and fate of Alstom
The French State, which currently sits on the board of directors of Alstom via actions on loan from Bouygues, “confirms terminate the securities lending (…) no later than October 17, 2017 and that it will not exercise the purchase options data by Bouygues”, still shows this release.
On the basis of information from the latest financial statements of Alstom and Siemens, the new entity has a backlog of $ 61.2 billion euros and weighs in at 15.3 billion euros of turnover for 62.300 employees in more than 60 countries. Its adjusted operating income s”amounts to € 1.2 billion for an adjusted operating margin of 8%. The annual synergies expected to amount to 470 million euros at the latest four years after the completion of the transaction.
Pressure of the Chinese “This merger of franco-German between equal sends a strong signal in many ways. We are Europe’s work and together with our friends from Alstom, we create a new european champion in the rail industry for the long term. This will enable us to offer our customers around the world a portfolio of products that are more innovative and more competitive”, said Joe Kaeser, President and ceo of Siemens AG.
This last has not failed to cite, without naming it, the emergence of a chinese giant as a trigger factor of the consolidation of the sector.
“The global market has changed significantly in recent years. A dominant player in Asia has altered the dynamics of the global market and the digitization will impact the future of mobility. Together, we can offer a wider choice and we will drive this transformation for our customers, our employees and our shareholders in a responsible and sustainable “, said Joe Kaeser.
This asian actor dominant is none other than the chinese group in the “China Railway Rolling Stock Corporation (CRRC), which is now nearly 30 billion euros of turnover. In 2014, aiming to create a national champion of the rail, China has consolidated two public groups of railway equipment, CNR and CSR, to give birth to CRRC, which today dominates the world market through an aggressive tariff formidable that it can achieve orders outside of China ($8.1 billion in 2016, up 40% year on year). In march 2016, CRRC was selected to supply trains for the metro network of Chicago, a contract of $ 1.3 billion. After the United States, Argentina, South Africa, Thailand or Pakistan, the chinese giant eyeing now on the european markets: in December, its subsidiary CRRC Zhuzhou Locomotive concluded the sale of three blocks of high-speed train to the Czech Republic, its first contract in the european Union. Strengthening its offensive european, CRRC has also proposed early this year to inject 300 million euros to contribute to the recovery of the railways in bulgaria.
“Combining their forces”, the two european groups “will strengthen their advantage in the subways and urban transport, which will intensify the pressure on CRRC”, which is less efficient on this niche on the TGV, warns Zhao Jian, a professor of Jiaotong University in Beijing, quoted Tuesday by the chinese newspaper Global Times.
Value creation
“Today is a key moment in the history of Alstom, which confirms its position as a platform of consolidation of the railway sector. Mobility is at the heart of the issues of the world today. The modes of transport of the future will be clean and competitive. Thanks to its global presence on all continents, its size, its technological know-how and its unique positioning in the transport digital, the union of Alstom and Siemens Mobility will bring to our customers and ultimately to all the citizens of the systems smarter and more efficient to face the challenges of the mobility of cities and countries. By combining experienced teams, geographic presence, complementary expertise and innovative Siemens with ours, the new entity will create value for customers, employees and shareholders, ” said Henri Poupart-Lafarge, President and ceo of Alstom. “I am particularly proud to lead the creation of such a group that will, without doubt, the future of mobility. “The French State welcomes
In France, Alstom and Siemens will launch the procedure of information and consultation of their councils, according to the French law prior to the signing of the contract documents. If Alstom were to decide not to continue with the operation, it should pay a termination fee of 140 million euros. The operation should be carried out at the end of the calendar year 2018.
The French government welcomed the announcement, seeing it as an opportunity to better anchor the French group to the international while maintaining employment for at least four years.
“This operation illustrates the commitment of the French government to strengthen the industrial Europe and the european economy”, argued the minister of the Economy Bruno Le Maire in a press release, on the eve of a franco-Italian summit highly anticipated, which should solidify an alliance between Paris and Rome in the naval sector.
