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Alstom Confirms Tie-Up Talks With Siemens, Discussions On-Going

Alstom Confirms Tie-Up Talks With Siemens, Discussions On-Going”

Alstom confirms being in discussions with Siemens in connection with a possible combination of Alstom with Siemens Mobility Division.

Citing anonymous sources, Bloomberg News reported Thursday that one scenario Siemens bosses are considering is trading the group's rail business for a large stake in Alstom. They could also look at joint ventures, another person said.

The French government said earlier on Friday that it had nothing against a potential merger between the two companies if the deal does not lead to job cuts.

Alstom declined to comment on the reports when contacted by AFP, while Siemens and the French transport ministry could not immediately be reached for comment.

The talks are a throwback to similar discussions between both companies in 2015 that were cut short when Alstom instead signed an alliance with USA giant General Electric.

Investors liked what they heard, boosting Alstom's share price on the Paris stock exchange, where it rose more than four percent.

The stock gained 1.4 percent by 1500 GMT to trade at 117.55 euros ($140.11), outperforming the DAX index of leading German shares.

A source familiar with the discussions told Reuters on Friday that if the deal with Alstom goes through, Siemens would have a slight majority but Alstom's French CEO Henri Poupart-Lafarge would head the merged company. It recorded sales of €7.3 billion and booked €10.0 billion of orders in the 2016/17 fiscal year. While Bombardier dwarfs Siemens in rolling stock revenue, Siemens makes nearly double that of Bombardier in signaling, according to Barclays analysts.

"It's obvious there's a lot of consolidation going on", Siemens Chief Financial Officer Ralf Thomas said in an interview in May, calling talk of a tie up with Bombardier "rumors".

"Assuming a solution can be found that both parties can agree to and anti-trust authorities allow the merger to proceed, there would be a significant opportunity to create an even stronger global signalling leader and take out costs", analysts at Barclays said in a note.



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