Alstom/Siemens : towards the birth of an Airbus of the rail

The announcement should take place this Tuesday night. Or Wednesday. After a first approximation mentioned and then had an abortion in 2014-2015, Alstom and Siemens are expected to announce their merger, in the hours to come. For the two giants, which are, respectively, 7.8 and 7.3 billion euros in annual sales, it is officially to unite in the face of the chinese giant CRRC, the product of a merger driven by Beijing and its eye now on the european markets by discussing with the Czech Skoda Transportation.

The conglomerate German meets on Tuesday its supervisory board, while the French group will hold a board of directors at the same time. In parallel, therefore, the two companies will vote on the project, before likely communicate together on their decisions.

A group installed and listed in Paris

According to the Handelsblatt, a German economical magazine, the agreement already negotiated provides for the absorption of the rail division to Siemens for Alstom, specialised in the rail since the divestment of its pole energy at General Electric, to form a group, installed, and listed in Paris but the German would take the half of the capital.

The French authorities, who argue for such a connection, insist on the necessity of a merger “balanced”. In the context of the current discussions, the non-executive chairman of the future entity would be chosen by Siemens and the director-general would be the current president of Alstom Henri Poupart-Lafarge, which would be also an administrator. The board would comprise 11 members, 6 of whom are appointed by Siemens.

Should it materialize, this agreement would seal the first franco-German alliance since the arrival at the Elysee Emmanuel Macron, who is campaigning for greater european economic integration. The opponents of the head of State, however, began to put pressure on the government by criticising the way in which a new “flagship French industrial”, and not least because the high-speed train manufactured by Alstom has long been one of the glories of French, would pass under the German flag.

| Also read : Alstom/Siemens : the government is trying to reassure

The State should not exercise its option to purchase

As well as, other French interests are affected by the operation. The Bouygues group holds, in fact, 8.3% of the capital of Alstom, and is the owner of 20% extra that he has loaned to the French State in 2014 to facilitate the sale to General Electric of the activities of Alstom in the energy. According to sources contacted by Reuters news agency, the State will not exercise its purchase option on these 20% to the market price, which will expire on October 17. In this case, Bouygues will have 28.3% of the capital of Alstom, and will be the largest shareholder, but he will see the participation diluted by half in the framework of an agreement with Siemens.

Finally, in addition to an agreement between the two groups, the merger will then receive the green light from the european Commission, which could involve the disposal of assets to prevent abuse of a dominant position. The French authorities are not concerned about these issues, anti-trust, an aspect that, according to analysts at Barclays, the Ceo of Alstom Henri Poupart-Lafarge, however, has cited on several occasions as an element of concern in the framework of an european consolidation of the railway sector.

(With AFP)

Like this post? Please share to your friends:
Leave a Reply