LONDON (ShareCast) - (ShareCast News) - Germany's Siemens and France's Alstom announced on Wednesday that they will merge their rail operations to create "a new European champion in the rail industry".
Under the terms of the deal, which has been approved by the board of both companies, Siemens will receive 50% of Alstom's share capital on a fully diluted basis. The new combined group, Siemens Alstom, will be listed in France with its headquarters in Paris and it will be led by Alstom chief executive Henri Poupart-Lafarge.

The companies said their two businesses are largely complementary in terms of activities and geographies.

Joe Kaeser, president and CEO of Siemens, said: "The global market-place has changed significantly over the last few years. A dominant player in Asia has changed global market dynamics and digitalisation will impact the future of mobility. Together, we can offer more choices and will be driving this transformation for our customers, employees and shareholders in a responsible and sustainable way."

Meanwhile, Pourpart-Lafarge said: "Today is a key moment in Alstom's history, confirming its position as the platform for the rail sector consolidation. Mobility is at the heart of today's world challenges. Future modes of transportation are bound to be clean and competitive. Thanks to its global reach across all continents, its scale, its technological know-how and its unique positioning on digital transportation, the combination of Alstom and Siemens Mobility will bring to its customers and ultimately to all citizens smarter and more efficient systems to meet mobility challenges of cities and countries.

"By combining Siemens Mobility's experienced teams, complementary geographies and innovative expertise with ours, the new entity will create value for customers, employees and shareholders."

Based on information from the last annual financial statements of both companies, the new entity will benefit from an order backlog of €61.2bn, revenue of €15.3bn and adjusted earnings before interest and taxes of €1.2bn.

At 1110 BST, Siemens shares were up 1.7% to €118.55 and Alstom was 5.1% higher at €35.34.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE