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Image Source: Reuters

Image Source: Reuters

Business Combination Agreement For Siemens And Alstom

Munich, Germany: A business combination agreement (BCA) has been inked on 23 March 2018 between technology company Siemens and transportation company Alstom for a proposed mobility business, including a rail traction drive business.

This is following the Memorandum of Understanding signed on 26 September 2017, along with the completion of required works council procedure and consultation process at Alstom.

This development effectively pitches together two major players with complementary portfolios in the railway industry. The joint venture will be named Siemens Alstom, and the Franco-German group will be headquartered in Saint-Ouen on the suburb of Paris, France.

Henri Poupart-Lafarge, Alstom’s chairman and chief executive officer, commented: “Both companies are working diligently and in a very good spirit to progress towards closing. These first nominations illustrate the companies’ commitment to balance in the governance of the future company.”

The proposed leadership was also announced at the signing of this BCA, with the board of directors comprising 11 members. Six of whom (including the chairman), will be appointed by Siemens, with four independent members and a chief executive officer.

Siemens has also proposed Roland Busch, its managing board member, as chairman Siemens Alstom’s board of directors. Yann Delabriere, who currently serves as lead director on Alstom’s board, will be appointed vice-chairman and independent director of Siemens Alstom.

Currently, this merger is subject to regulatory and shareholders’ approval which is targeted to conclude by the end of 2018. The group also requires foreign investment clearance from the French Ministry for the Economy and Finance on top of permissions from anti-trust authorities in the country.

Siemens has already commenced the internal bifurcation process of its mobility business from other segments in order to facilitate the merger.

Annual statements from both Siemens and Alstom have suggested that the combined company will have an order backlog of 61.2 billion euros (US$75.1 billion), revenue of US$18.8 billion and adjusted earnings before interest and taxes ofUS$1.47 billion.

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