Published: Thu, September 28, 2017
Global Media | By Garry Long

European rail deal fulfils Macron vision, French fear for jobs

European rail deal fulfils Macron vision, French fear for jobs

Germany's Siemens has confirmed that it will merge its rail operations with France's Alstom to create "a new European champion in the rail industry".

Two sources said the French company plans to pay shareholders a special dividend if the deal does go through.

"Politicians will also likely try to ensure some form of jobs protection in France (28 per cent of Alstom's workforce) and Germany (39 per cent of Siemens'workforce), making cost synergies hard to extract", analysts wrote in a note. The new business will be based and listed in France and will be run by a French chief executive officer, the people said.

The combined company to be called Siemens Alstom will have US$18 billion in revenues - about double that of Bombardier Transportation - and US$1.4 billion in adjusted EBIT.

The failed intervention created resentment between Siemens CEO Joe Kaeser and his then opposite number Patrick Kron, with the German company turning to Bombardier in its bid to stem the Asian tide through proposed joint ventures in train manufacturing and signaling.

He added that the global market has changed with the creation of a dominant competitor in China and digitalization. Annual cost savings of US$554.2 million are expected four years after closing.

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But Jones said the company did not fully understand TfL's concerns and that he was eager to speak with its representatives. It now operates ride services in more than 600 cities, covering as much as 95 percent of the USA population.

Global headquarters and the rolling stock management team will be located in Paris, France, whilst headquarters for the Mobility Solutions business will be in Berlin, Germany, with a total of 62,300 employees across 60 countries.

The union has the unanimous support of Alstom's board and Siemen's supervisory board, as well as the support of Bouygues and the French State. To ensure management continuity, Henri Poupart-Lafarge will continue to lead the company as CEO and will be a board member.

2013- Siemens bought Britain's Invensys Rail Group for 1.7 billion pounds ($2.3 billion).

It is noted that merger between Alstom and Siemens has come to an end at end of August between Macron and German Chancellor Angela Merkel, and that two leaders have agreed to unite. The company has signed a Memorandum of Understanding to merge its rail traction business with Alstom.

The three major train and rail technology groups active in Europe have been looking at combining their businesses as larger Chinese state-backed rival CRRC embarks on a global expansion drive.

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