Siemens and Alstom CEOs: European rail mega-merger is about business not politics

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Siemens and Alstom’s decision to merge their rail operations is about business and not politics, according to the companies’ chief executives, despite the deal being framed as a response to China’s advancing dominance.

“The rationale is undoubtedly (to do with) business, it’s a unique opportunity to create a global leader and a European champion… in a dynamic market,” Alstom CEO Henri Poupart-Lafarge said. he added the deal would create a “world leader” in the rail business.

Meanwhile, Siemens CEO Joe Kaeser said the deal would make the two companies more competitive and that the merger was a “compelling deal.” He welcomed the state approval of the deal, saying “we welcome that the governments on both sides have been supportive, as have the unions.”

Their comments come after it was announced on Tuesday that the German industrial group Siemens and its French competitor Alstom, will merge their rail operations in a bid to compete with China’s state-owned CRRC.

The merged companies will be known as Siemens Alstom and will be led by Alstom’s current Chief Executive Henri Poupart-Lafarge. Siemens will designate six directors to the 11-member board of directors and will own a 50 percent share of the new company.

Source: CNBC