Siemens-Alstom merger to be completed by end of 2018
SPEAKING at a joint Siemens-Alstom press conference in Paris on September 27, Mr Joe Kaeser, president and CEO of Siemens, confirmed that the merger of Siemens Mobility and Alstom should be completed at the end of 2018. Kaeser also said there will be redundancies.
Kaeser confirmed that negotiations with anti-trust authorities regarding the merger will take some time. “We believe there is no fundamental risk, otherwise we wouldn’t be there,” he said. “This is a legal and regulatory process which we will work through diligently with the authorities in Brussels. It is very important that we make everything very transparent.”
Kaeser also said that the two companies have set up a balanced governance model. “We want continuity,” he said. “We will have a balanced approach to share the benefits, and carry the burdens of the transaction.”
When asked whether the merger will result in redundancies, Kaeser said: “Of course there will be. We will bundle our resources.”
Kaeser paid tribute to the current CEO of Siemens Mobility, Mr Jochen Eickholt, who is likely to be one of the first casualties of the merger, as Alstom’s chairman and CEO, Mr Henri Poupart-Lafarge, will head the new company. “Jochen Eickholt has brought Siemens Mobility from a meaningless to meaningful business,” Kaeser said.
Kaeser brushed aside questions regarding the recent talks between Siemens and Bombardier Transportation regarding a merger, and would not say why they had failed, but he did say that Siemens has been looking at possible mergers for a long time. “We have been examining what will be the best fit, and the outcome of that analysis is clearly Alstom,” he said.
This was confirmed by Poupart-Lafarge: “This is no do-or-die type of merger. There was no emergency. Alstom has been enjoying a great dynamism in a growing market. When we looked four years ago, Siemens was the best fit by far. So, when the opportunity arose, it was perfectly in line with our wishes. The transaction has been very fast because a lot of the groundwork has already been done.”
Poupart-Lafarge pointed to two clear trends in the rail market: globalisation and digitalisation. “Globalisation creates a lot of opportunities, but also a lot of opportunities for our competitors whether they be in China, Japan or elsewhere,” he explained. “The digitalisation of the market means we need to have strong technologies. We are two very innovative companies, but it requires a lot of investment and expertise.”
The merger is expected to strengthen the competitive position of Siemens and Alstom. “CRRC is extremely strong, and has changed the picture of the market a little,” Poupart-Lafarge said. “But what matters is customer proximity, innovation and the capacity to innovate – something where we are advanced compared with our competitors.”
Looking to the long term, Kaeser said the merger will allow the new company to harmonise technical development. “We can harmonise research and development and engineering,” he explained. “We need to bundle our services and get more out of them. It is about playing offense and not defence.”
Poupart-Lafarge said it is too early to look at whether specific product lines will be rationalised. “It is more a platform than a product concept,” said. “The goal is to take the benefits of both platforms to make the best train fit for the customer. Probably, in time, there will be global product platforms.”
“We are going into the fourth industrial revolution,” Kaeser said. “The merger will be a test of how we face the future. The merger will strengthen European technical leadership. We are creating a new European champion in rail with global reach. The Siemens-Alstom merger will be living proof that we can get things done in Europe.”