France is open to the possibility of expanding the rail combination between Siemens AG and Alstom SA to include Bombardier Inc., the Montreal trainmaker left on the sidelines of talks to create an industry champion to take on China.
The likely transaction has political ramifications, since the French state owns around 20pc of Alstom. Under the agreement, Siemens will transfer its mobility business, which makes rail and signaling equipment, to Alstom in exchange for 50 percent of the new company.
"They lost out this time but there's presumably going to be more consolidation", he said, noting competitors of varying sizes remain around the world.
"We are creating a new European champion in the rail industry for the long term", said Joe Kaeser, the chief executive of Siemens.
The merged company will be called Siemens Alstom, with headquarters based in Germany and rolling stock based in France.
While the TGV was still the fastest railed vehicle after a 357.2 miles per hour run in 2007, the loss confirmed the pressure facing Alstom not just in the shape of Siemens but also from increasingly export-oriented Asian manufacturers and Canada's Bombardier Inc., which had become the largest western train-maker following the 2001 purchase of Daimler AG's Germany-based Adtranz arm. Alstom has pared back its operations in recent years after selling its power-generation business to General Electric Co. Alstom and the Canadian firm won a 3.3-billion-euro contract to supply double-decker cars to the Belgian national railway through 2021 and are working together on trains for the Paris region's commuter network and Montreal's subway system.
Alstom shares jumped as much as 8.5 percent and Siemens rose 2 percent as analysts focused on the cost savings.
Siemens, Alstom and Bombardier declined to comment. Jochen Eickholt, CEO of Siemens Mobility, will assume an important responsibility in the merged entity, the company said.
The tie-up should help the companies better compete with China's state-backed operator CRRC.
Siemens Alstom will have combined revenues of €15.3bn and an order backlog worth €61.2bn, with Alstom chairman and CEO Henri Poupart-Lafarge heading up the company.
"This will give our customers around the world a more innovative and more competitive portfolioThe global marketplace has changed significantly over the last few years".