Alstom SA, the maker of France’s iconic Train a Grande Vitesse high-speed trains, and German industrial leader Siemens AG on Friday signed an agreement on creating a global leader in the rail industry.
The business combination agreement (BCA) sets the terms of combining Alstom with Siemens’ mobility business, including its rail traction drive business, after the two firms unveiled their plans last year.
NEW LEADER
“With the signing of the BCA, we have reached an important milestone on the way to building a new leader capable of tackling the challenges of tomorrow’s mobility,” Alstom chief executive Henri Poupart-Lafarge, who is to be the CEO of the new company, said in a statement.
Siemens board member Roland Busch is to serve as chairman of the board of directors of the combined entity, which is to be based in France.
Siemens is to control 50 percent of Alstom immediately, but will be blocked from taking a bigger than 50.5-percent stake in the next four years.
Alstom’s trade unions objected to the merger, fearing job cuts and closures.
TRANSFORMATION
An Alstom-Siemens merger has been mooted for years and completes the transformation of the French group, which in 2015 sold its energy business to US rival General Electric Co for 9.5 billion euros (US$11.7 billion).
The merger would create the world’s top firm for rail signalization and the No. 2 for building train carriages, which should help the firms face rising Chinese competition. It is expected to be completed by the end of the year.
Alstom employs 32,800 people worldwide, while Siemens Mobility has 28,800 staff.
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