Alstom acquired by Siemens: but what do the shareholders do?

At a General Meeting held on 17 July 2018, the shareholders voted in favour of the acquisition of Alstom by Siemens. What a pathetic decision, when at the announcement of the discussions with Siemens the executives and the board of directors sold the idea of a “merger between equals”!

“Merger between equals”. Marvellous, this idea probably encouraged by the investment banks keen on gaining commissions from deals that are difficult to complete. “Merger between equals”, had been hammered out during the Lafarge-Holcim, Technip-FMC or Essilor-Luxottica deals. In all cases, including Alstom, the French company had in fact been purchased, taken over and the utopia of the “merger between equals” was transformed into a much more prosaic reality: a takeover.

When we analyse the aforementioned different deals, the French company had real industrial, commercial and human assets, which would have enabled it to evolve differently and to ensure that the know-how and the capacity of the teams remained in France… The decision-making centres of Lafarge and Technip have left France, that of Luxxotica-Essilor will soon join Italy, with the main Italian shareholder holding the majority of the Board and a third of the capital.

For Alstom, following a question asked by Phitrust on keeping jobs, a 4-year time period (which seems long in the answer of the Alstom board…) seems the maximum, which concretely means that the Alstom technology, notably TGVs, will probably not continue in the long term, with Siemens itself having an equivalent technology and factories to run in Germany. General Electric is preparing the French State for not keeping its pledge made 2 years ago on turbines. How much time will Siemens need to repatriate the majority of the export contracts to Germany? The hope is that the regions and the French State will impose production in France for trains and locomotives operating in France, but is this possible under European law?

The most incredible thing is that all the investors validated this takeover, like the aforementioned deals, without even questioning the relevance of another strategy, the extra-financial impacts notably in terms of jobs (where are the “Responsible” investors?), the cultural differences between the two companies (more than 2 out of 3 mergers are failures…).

Would not an Alstom-Bombardier merger have been a more strategic move, where certain metros of the RATP in Paris have been developed jointly with success and that the two entities are much more complementary on a geographical level and therefore the distribution of factories than the Siemens-Alstom merger?

Investors have only looked at the financial strategic outlook proposed by both companies, without asking fundamental questions on saving jobs in the regions where Alstom operates, the enhancement of existing technologies, which for some of them are duplicated with that of Siemens, the capacity of the Alstom teams, which will have difficulty integrating within a competitor that they have fought against with difficulty for a long time… Questions that should at least be asked by “Responsible” investors, institutional investors, the French State, Bouygues… Unless all the shareholders are seeking a financial exit at the best price…

Decisions such as Brexit, or populist movements, are driving this industrial desertification and the loss of our industrial flagships, driven by financiers, shareholders or executives who have their own agenda, which differs greatly from that of the employees and their families…

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