Alstom, Siemens to merge rail operations to counter China rival
MUNICH/PARIS: German industrial group Siemens AG and French rival Alstom SA agreed to merge their rail operations, creating a European champion to better withstand the international advance of China’s state-owned CRRC Corp Ltd.
Siemens will own 50% plus a few shares of the joint venture, to be called Siemens Alstom, while Alstom will supply Henri PoupartLafarge as chief executive, helping to counter criticism that France is giving up control of another national industrial icon. The nonexecutive chairman will come from Siemens.
The framework deal, which still has to be approved by Alstom shareholders as well as regulators, is a Franco-German industrial breakthrough for French President Emmanuel Macron but is a move that has riled opposition politicians.
Their worries centre on France losing control of its TGV high-speed train, a symbol of national pride that has highlighted French engineering skill, and possible job losses.
Finance Minister Bruno Le Maire said on Tuesday that the French government welcomed the planned tie-up, which he said would protect French jobs.
The French state said it would not exercise an option to buy a 20% stake in Alstom from industrial group Bouygues SA.
The Siemens and Alstom transport businesses span the iconic French TGV and German ICE high-speed trains as well as signalling and rail technology. They have combined sales of € 15.3 billion (RM75.7 billion) and earnings before interest and tax of € 1.2 billion. – Reuters