The Siemens and Alstom transport businesses have combined sales of 15.3 billion euros and earnings before interest and tax of 1.2 billion euros, raising questions over whether the deal could fall foul of European anti-trust regulations. It is expected to generate revenues of 18 billion USA $and adjusted operating earnings of United States $1.4 billion.
"The merger is necessary to challenge the Chinese mastodon (CRRC Corp) which is two to three times bigger than we are", said Claude Mandart, head of the biggest Alstom trade union, the CFE-CGC, earlier Tuesday. Alstom already has a presence in the Middle East, Africa, India and Middle and South America, and Siemens has a presence in the United States, Russia and China.
Under the deal, Siemens will have a small majority of the Paris-based and listed combination, which promises eventual annual cost savings of 470 million euros ($552 million) a year, while Alstom boss Henri Poupart-Lafarge will become its CEO.
Poupart-Lafarge also told analysts that the deal wouldn't impact the two companies' relationships with Bombardier.
Hardik Pandya is a smart cricketer, opines Rahul Dravid
With his consistent performances, Pandya is expected to carry the weight of expectations like other star players of the team. Smith was gutted to have lost after being in a good position, and said: "We set it up beautifully, the first 37-38 overs".
The critical move in propelling Alstom toward a tie-up with Siemens came with the sale of the French group's power-generation business to General Electric Co.in 2015, according to Maria Leenen, CEO of German rail consultancy SCI Verkehr.
"Given the cyclicality of Bombardier's Aerospace operations, in our view, it was important that Bombardier maintained control of Bombardier Transportation", he wrote in a note before the Siemens-Alstom merger was announced. The company has signed a Memorandum of Understanding to merge its rail traction business with Alstom.
A special dividend would even out the value of Siemens and Alstom, which has too much cash on its balance sheet, to smooth the intended 50-50 joint venture, one of the sources said.
French unions remain anxious about potential job losses when Alstom SA becomes Siemens Alstom after the deal announced Tuesday. The transaction is also subject to clearance from relevant regulatory authorities, including foreign investment clearance in France and anti-trust authorities as well as the confirmation by the French capital market authority (AMF) that no mandatory takeover offer has to be launched by Siemens following completion of the contribution. They are aiming to close the deal by the end of 2018.