Alstom, Siemens to meet this week
PARIS: Alstom SA said it was in talks with Germany’s Siemens AG about a possible combination of their rail businesses, a tie-up that would bring together two European rivals and leave Canada’s Bombardier exposed to cutthroat competition from China.
The boards of Siemens and Alstom are scheduled to meet early this week to approve the deal, which may be announced as early as tomorrow, according to people familiar with the matter. The German company would transfer its rolling material and signaling businesses to its French counterpart in exchange for a stake of about 50 per cent in the enlarged Alstom.
“No final decision has been made, discussions are ongoing and no agreement has been reached,” said Alstom on Friday, confirming a report the previous day that the two engineering firms were in talks. Siemens acknowledged Alstom’s statement and also said that no decision has been reached.
An agreement between the French and German high-speed trains adds a surprise twist to negotiations in the global train industry seeking to consolidate. Bombardier had also been in talks with Siemens about combining the companies’ rail divisions. Talks had centred on two joint ventures, one on signaling operations and rolling stock.
Siemens and Bombardier had been nearing a deal toward the end of August, but talks stalled over concerns including some perceived challenges faced by the Canadian parent.
The talks for a tie-up come as all three companies are facing increased competition for contracts from industry leader CRRC Corp of China, formed from a 2015 merger of the country’s two regional train makers.
The model for such cooperation between the Eurozone’s two biggest economies is Airbus SE, the Toulouse-based aircraft manufacturer formed from companies from four European countries that went on to become the biggest competitor to Boeing Co. Macron has repeatedly said that cross-border cooperation in the region offers the best way to tackle issues ranging from industrial development to immigration and defence.