Siemens to merge rail operations with French rival Alstom

Munich

SIEMENS AG and Alstom SA agreed to merge their rail businesses in a deal that brings together former arch-rivals from Germany and France to create a European transportation giant aimed at countering competition from China.

Siemens will transfer its business making train and transit cars and signalling equipment to Alstom in exchange for a stake of just above 50 per cent in the enlarged company, according to a statement.

The renamed Siemens Alstom, with sales of about 15.3 billion euros (S$24.46 billion), will remain based in the Paris area. Alstom chief executive officer Henri Poupart-Lafarge will keep his position and the chairman will be named by Siemens.

"We need to strengthen our ability to compete," Siemens CEO Joe Kaeser said in a video about the tie-up, which the companies call a merger of equals. "A dominant player in Asia has c…