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100% refocus on rail for Alstom as €12.4bn energy division sold to GE.

Posted by SmartRail World Staff on Nov 3, 2015

maintenanceAGV-NTVWith the sale of its energy activities division to General Electric now completed, Alstom have confirmed they are now entirely refocused on rail transport. Having received €12.4 billion for the sale of its energy division, €700 million of this will be used to acquire GE’s signalling activities. This transaction will bring in 1,200 new rail employees and open the US signalling freight market to Alstom. With this strengthening of its business in North America, the French giant now holds a significant presence on all continents along with a record order book. This news comes the same week that Hitachi confirmed it acquisition of the Ansaldo rail businesses from Finmeccanica.

Alstom recorded sales of €6.2 billion and booked €10 billion of orders in the 2014/15 fiscal year. Present in over 60 countries and employing 32,000 people, projects include recent significant awards such as the metros for Sydney, Kochi, Riyadh, Paris; signalling solutions for Toronto greater area and Denmark; tram systems for Rio de Janeiro, Lusail and Sydney as well as suburban trains for South Africa, most of these projects being associated with long term maintenance contracts.  

"Today represents a major milestone in Alstom’s history. We managed to secure a win-win deal with General Electric, which protects the interests of employees and customers in the Energy businesses, while reinforcing Alstom’s positioning in the transport industry. Alstom today holds leadership positions on a globally growing rail market and will rely on a solid financial base to support its growth strategy. This company, entirely refocused on transport, also benefits from a skilled management team led by Henri Poupart-Lafarge and I am confident in its ability to drive the Group towards future successes" declared Patrick Kron, Chairman and CEO of Alstom. 

Alstom will also reinvest in three Joint Ventures with General Electric (in the fields of grid, renewable and French steam & nuclear) for an amount of around €2.4 billion. And part of the cash from the deal - in the range of €3.2 to €3.7 billion - should return to shareholders. The Board of Directors, meeting on 4 November 2015, will propose the launch of a public share buy-back offer (OPRA) followed by a capital reduction through cancellation of shares.

 

 

The Alstom news comes the same week as Hitachi and Finmeccanica announced the closing of transactions in relation to Hitachi’s acquisition of AnsaldoBreda S.p.A and Finmeccanica entire economic interest in Ansaldo STS (Ansaldo Signalling and Transportation Systems) S.p.A. Finmeccanica now becomes a pure Aerospace, Defence and Security player with Hitachi receiving a major boost in its rail growth.

Alistair Dormer, Global CEO Hitachi Rail Group, commenting on the acquisition: “With these acquisitions Hitachi will strengthen its position in signalling and traffic management systems, expand turnkey operations and enlarge its portfolio with world-class products. The combination of Ansaldo and Hitachi’s complementary portfolios will also deliver a unique opportunity to pursue untapped growth potential in new markets.”

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Topics: Signalling

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