Siemens and Alstom have signed a memorandum of understanding (MoU) to combine Siemens’ mobility business including its rail traction drives business, with Alstom. The transaction brings together two innovative players of the railway market with unique customer value and operational potential.
The two businesses are largely complementary in terms of activities and geographies. Siemens will receive newly issued shares in the combined company representing 50 percent of Alstom’s share capital on a fully diluted basis and warrants allowing it to acquire Alstom shares representing two percent points of its share capital.
“This Franco-German merger of equals sends a strong signal in many ways. We put the European idea to work and together with our friends at Alstom, we are creating a new European champion in the rail industry for the long term. This will give our customers around the world a more innovative and more competitive portfolio,” said Joe Kaeser, president and CEO of Siemens AG.
“The global market-place has changed significantly over the last few years. A dominant player in Asia has changed global market dynamics and digitalization 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.”, he further added.
Henri Poupart-Lafarge, chairman and chief executive of Alstom SA, said: “Today is a key moment in Alstom’s history, confirming its position as the platform for the rail sector consolidation. Mobility is at the heart of today’s world challenges. 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. By combining Siemens Mobility’s experienced teams, complementary geographies and innovative expertise with ours, the new entity will create value for customers, employees and shareholders.”
In a combined setup, Siemens and Alstom expect to generate annual synergies of €470 million ($682 million) latest in year four post-closing and targets net-cash at closing between €0.5 — €1.0 billion.