(MENAFN- AFP) The maker of France's iconic TGV trains is set to announce a merger with German industrial leader Siemens as early as Tuesday in a giant and politically tricky deal that will create a new European champion.
The board of partly state-controlled Alstom, the manufacturer of French high-speed trains which are a source of national pride, is set to meet on Tuesday to discuss the tie-up with its German competitor.
Takeovers of major industrial companies are extremely sensitive in France, where successive governments have sought to protect the country's manufacturing capacity and avoid major job losses.
"It's a huge rip-off organised by the state which will place Alstom Transports, one of the French industrial jewels, under complete domination by Siemens," said the hard-right nationalist Nicolas Dupont-Aignan.
"It will allow Siemens, without spending a cent, to become the owner of our technology, our trademarks," he added in one of the first attacks on the deal.
The supervisory board of Munich-based Siemens is also meeting Tuesday to discuss a potential deal, as well as further ventures with Canada's Bombardier group whose European operations are based in Germany.
The Alstom-Siemens merger has been mooted for years and would complete the dismantling of the French group which sold off its energy business to American rival General Electric last year in a 9.5-billion-euro ($11.3-billion) deal.
The structuring of the deal -- including the future management and final ownership -- is being worked out, media reports say, but the French state is expected to have no stake in the new company.
"The merger is necessary to challenge the Chinese mastodon (CRRC Corp) which is two to three times bigger than we are," said Claude Mandart, head of the biggest Alstom trade union, the CFE-CGC.
"At the same time we're worried because we're in direct competition with Siemens in all areas: very high speed trains, signalling, regional trains, metros, trams," he added.
- Political opposition -
New centrist President Emmanuel Macron blocked a takeover of a strategic shipyard in eastern France by the Italian group Fincantieri in July, raising hackles in Rome where his move was viewed as protectionist.
But the French government is believed to be keen on creating an "Airbus for rail" -- a reference to the successful European aircraft maker -- which would have combined annual sales of around 15 billion euros.
Macron, a former investment banker, was accused during campaigning by his opponents of encouraging the acquisitions of French companies during his time as economy minister from 2014-2016.
After blocking the shipyard deal, the Alstom-Siemens tie-up would underline his pro-business credentials and his desire to create a new closer political partnership with Germany.
Backers believe the new Franco-German rail giant would be more of a match for Chinese state rival CRRC, which is eyeing Skoda Transportation in the Czech Republic as a potential foothold in Europe.
"I obviously hope... that this 'Airbus for rail', which is not a bad idea, is not created to the detriment of France," said the right-wing head of the Paris region, Valerie Pecresse, on Tuesday.
"I hope that Alstom respects its undertakings on manufacturing in France which were made at the time new orders were placed by the Paris region," she added.
MENAFN2609201701430000ID1095898250
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.