Siemens and Alstom say their train-making merger will save 470 million euros ($555 million) a year and help European industry stand up to swelling Asian competition — but they insist it's not just about cost cuts.
It's not about a German industrial heavyweight gobbling up a French national jewel, either, the two companies and the French and German governments argued Wednesday, despite uproar from across the French political spectrum over the deal.
Shares in both companies rose Wednesday, and Siemens and Alstom went to lengths to market it as a "merger of equals."
French unions remain worried about potential job losses when Alstom SA becomes Siemens Alstom after the deal announced Tuesday. The French government owns 20 percent of Alstom and intervened repeatedly in the past to protect the struggling maker of high-speed TGVs and its jobs.
The merger "contains also a political message," Siemens President Joe Kaeser told reporters in Paris. "A global business needs a global view" instead of a nation-focused mindset, he said. The merger was announced just two days after German elections that saw a nationalist party gain parliament seats for the first time in decades.
"The merger will lead to a more balanced global footprint," he said. Alstom is strong in Africa, India, Central and South America, while Siemens is strong in China, Europe and the U.S., he added.
French Finance and Economy Minister Bruno Le Maire told reporters Wednesday that the deal is crucial given growing competition from Chinese train makers to meet worldwide demand for the kind of high-speed trains once exemplified by Alstom's TGVs. The French state will no longer have a role in the new company.
The German government welcomed it as "a cooperation project of European and global standing."
Chancellor Angela Merkel's spokesman, Steffen Seibert, said Wednesday that it's important that the two firms are consulting with employee representatives and that there are "parallel pledges" to maintain jobs at sites in Germany and France.
Siemens and Alstom say they aim to save 470 million euros a year within four years by joining their train manufacturing activities.
Alstom CEO Henri Poupart-Lafarge, who will run the merged company, said the deal would ultimately create jobs and innovation, and promised that no French site would close within the next five years.
Munich-based Siemens would hold 50 percent of the shares in the combined entity, with the chance to eventually acquire 2 percent more. The deal must be approved by Alstom shareholders and regulators, and is expected to close next year.