Siemens and Alstom join forces
Siemens and Alstom have signed a Memorandum of Understanding to combine Siemens’ mobility business including its rail traction drives business, with Alstom, with the corporate name of the combined group being be Siemens Alstom.
Joe Kaeser, President and CEO of Siemens AG (left) and Henri Poupart-Lafarge, Chairman and Chief Executive Officer of Alstom SA (right) at the joint press conference of Siemens and Alstom on 27 September 2017
Siemens will receive newly issued shares in the combined company representing 50 percent of Alstom’s share capital on a fully diluted basis, and as a combined setup, Siemens and Alstom expect to generate annual synergies of €470 million by year four.
In a press conference to announce the signing, Joe Kaeser, President and CEO of Siemens AG said: “Europe is the global leader in sustainable infrastructure and with this merger, two European companies are showing the world that they are determined to shape the mobility future together.
“The global market-place has changed significantly over the last few years. A dominant player in Asia has changed global market dynamics and digitalsation 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.”
The businesses of the two companies are largely complementary; combined, they will offer a significantly increased range of diversified product and solution offerings to meet multi-facetted, customer-specific needs, from cost-efficient mass-market platforms to high-end technologies.
The global footprint enables the merged company to access growth markets in the Middle East and Africa, India, and Middle and South America where Alstom is present, and China, United States and Russia where Siemens is present.
Customers will significantly benefit from a well-balanced larger geographic footprint, a comprehensive portfolio offering and significant investment into digital services. The combination of know-how and innovation power of both companies will drive crucial innovations, cost efficiency and faster response, which will allow the combined entity to better address customer needs.
“Mobility is at the heart of today’s world challenges,” added Henri Poupart-Lafarge, Chairman and Chief Executive Officer of Alstom SA. “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.”
The Board of Directors of the combined group will consist of 11 members and will be comprised of 6 directors designated by Siemens, one of which being the Chairman, 4 independent directors and the CEO. In order 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, shall assume an important responsibility in the merged entity.
The global headquarters of the combined business as well as the management team for rolling stock will be located in Paris and the combined entity will remain listed in France. Headquarters for the Mobility Solutions business will be located in Berlin, Germany.
In total, the new entity will have 62,300 employees in over 60 countries, and the merger is expected to be completed by the end of 2018.