The Strategist

France gives the nod to Alstom-Siemens merger

09/27/2017 - 10:07

The French government supported the plan to strengthen the position of the national industry through cooperation with companies from Germany. Paris has given its approval to a deal to merge French Alstom with railway division of German Siemens.

Currently, France owns about 20% of the machine-building company Alstom. If the division of the German concern Siemens Mobility is merged with the French railway business, then the Germans can get 50% + 1 share in Alstom. In the near future, the companies may announce the merger officially. The annual revenue of the combined company, according to experts, can amount to about 16 billion euros. Most likely, the newly formed company will be managed by CEO of Alstom, Henri Poupart-Lafarge. 

The current situation is not inviting to largest producers of railway transport in Europe so that they simply have to unite their efforts in order to maintain their leading positions in the market. This fact is largely explained by the growing competition from Chinese manufacturers of high-speed railways and trains. In particular, we are talking about creation of a powerful Chinese train manufacturer China railway rolling stock (CRRC) that took place in 2015. With the state support, this company plans to expand its sphere of influence globally.

The head of Siemens Joe Kaeser believes that the regulators are fully aware of the current scale of the Chinese CRRC and are unlikely to be able to oppose the agreement between European railway transport manufacturers. "Of course, everything will depend on the case, but no one can challenge the fact that now the Chinese are the dominant player," - said Kaeser.

Earlier it was also reported that the German machine building concern Siemens is negotiating a merger of the railway business with the Canadian engineering Bombardier.


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