Siemens Alstom merger creates European giant


French unions remain anxious about potential job losses when Alstom SA becomes Siemens Alstom after the deal announced Tuesday.

Alstom owns the TGV high-speed network in France while Siemens operates the equivalent system in Germany with its inter-city ICE trains. "This will give our customers around the world a more innovative and more competitive portfolio", said Siemens chief executive, Joe Kaeser.

"We are creating a new European champion in the rail industry for the long term". The second person said Siemens' supervisory board would decide the matter on Tuesday, also describing Alstom as the frontrunner.

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.

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Siemens CEO Joe Kaeser on Wednesday described the merger of his company's rail production unit with its French competitor Alstom as a bid to ensure their long-run worldwide competitiveness. In a combined setup, Siemens and Alstom expect to generate annual synergies of €470 million ($551.05 million) latest in year four post-closing and targets net-cash at closing between €0.5 billion ($0.59 billion) to €1.0 billion ($1.17 billion).

The ill-tempered contest between Alstom and Siemens has been a feature of the sector for decades and reached a boiling point in 2011, when the pair engaged in a public spat over the safety of competing high-speed models they were pitching to Channel Tunnel express operator Eurostar International Ltd. Macron, who advocated that European Union should be transformed into a stronger, more influential and functioning structure, is said to have made this call in Germany, waiting for last Sunday's elections.

Nevertheless, on the Toronto stock Exchange, Bombardier's share closed at $ 2.27 a, up 13 cents, or 6,07 %, even if Washington had not yet indicated whether he was going to impose punitive measures on the CSeries, following a complaint of the Boeing company. To ensure management continuity, Henri Poupart-Lafarge will continue to lead the company as CEO and will be a board member.

Alstom shares have surged 29 percent this year, giving the company a market value of 7.4 billion euros. They are aiming to close the deal by the end of 2018.