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Germany’s Siemens and France’s Alstom couple train units

The maker of France's iconic TGV trains Alstom and German industrial leader Siemens signed on Friday an agreement on creating a global leader in the rail industry.

Published: 24 March 2018 17:46 CET

Germany’s Siemens and France’s Alstom couple train units

A TGV train at Gare de Lyon railway station in Paris in February 2018. Photo: AFP

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.

“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,” said Henri Poupart-Lafarge, the chief executive of Alstom who will be the CEO of the new company, in a statement.

Roland Busch, a member of the management board of Siemens, is to serve as chairman of the board of directors of the combined entity, which is to be based in France.

Siemens will control 50 percent of Alstom immediately but will be blocked from taking a bigger than 50.5 percent stake for the four coming years.

Alstom trade unions objected to the merger, fearing job cuts and closures.

An Alstom-Siemens merger has been mooted for years and completes the transformation of the French group which sold off its energy business to American rival General Electric in 2015 for 9.5 billion euros.

The merger will create the world's top firm for rail signalisation and the number two for building train carriages, which should help the firms face rising Chinese competition.

The merger is expected to be completed by the end of the year.

Alstom employs 32,800 people worldwide while Siemens Mobility has 28,800 staff.

READ ALSO: France's Alstom inks €75 million supply deal with India metro firms

Swedish government shelves plans for two fast train links

In an announcement slipped out just before Christmas Eve, the government said it had instructed the Swedish Transport Administration to stop all planning for the Borås to Gothenburg link, stop the ongoing work on linking Hässleholm and Lund.

“The government wants investments made in the railway system to first and foremost make it easier for commuting and cargo traffic, because that promotes jobs and growth,” infrastructure minister Andreas Carlson said in a press release. “Our approach is for all investments in the railways that are made to be more cost effective than if the original plan for new trunk lines was followed.”

Ulf Olsson, the Social Democrat mayor in Borås, told the TT newswire that the decision was “a catastrophe”.

“We already have Sweden’s slowest railway, so it’s totally unrealistic to try to build on the existing railway,” he said. We are Sweden’s third biggest commuting region and have no functioning rail system, and to release this the day before Christmas Eve is pretty symptomatic.”

Per Tryding, the deputy chief executive for the Southern Sweden Chamber of Commerce, complained that the decision meant Skåne, Sweden’s most southerly county, would now have no major rail infrastructure projects.

“Now the only big investment in Skåne which was in the plan is disappearing, and Skåne already lay far behind Gothenburg and Stockholm,” he said.

“This is going to cause real problems and one thing that is certain that it’s going to take a very long time, whatever they eventually decide. It’s extremely strange to want to first suspend everything and then do an analysis instead of doing it the other way around.”

The government’s instructions to the transport agency will also mean that there will be no further planning on the so-called central parts of the new planned trunk lines, between Linköping and Borås and Hässleholm and Jönköping.

Carlson said that the government was prioritising “the existing rail network, better road standards, and a build-out of charging infrastructure”.

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