Siemens and Alstom merger to create ‘European champion’

By Keith Fender  

SIEMENS and Alstom announced on September 26 they had agreed a merger of the two company’s rail engineering businesses.

This followed months of speculation concerning a merger or joint venture between Siemens and a rival company, Bombardier.

Siemens’ Eurostar e320 ‘Velaro’ set No. 374009 sits next to Alstom Thalys TGV No. 4551 at Paris Nord on April 11, 2016. KEITH FENDER

Siemens and Alstom say they are joining forces to create a ‘European champion in mobility’, in particular to take on Chinese competitor CRRC, which is twice as big as the merged company, and will be called Siemens Alstom.

It will be based in Paris, as will its rolling stock business, although its signalling and digital services division will have its headquarters in Berlin.

Siemens will include its mobility division (rolling stock and signalling), plus its rail traction drives business, based in Germany, which until now has been part of its industrial large drives division.

All of Alstom will be included: the French group sold all its
non-rail, power-generation business to US company GE in 2014.

The new Siemens/Alstom company is expected to have revenue of €15.3billion and profits before tax of €1.2bn in 2018, when the deal will be finalised. Cost savings of €470m are planned by 2022, most of which will come from reductions in management and support staff rather than factory closures or changes.

Read more in the November issue of The RM – on sale now!

Enjoy more of The Railway Magazine reading every month. Click here to subscribe.