Cleary Gottlieb represented Alstom, which signed a Memorandum of Understanding on September 26, 2017, to combine Siemens’ mobility business with Alstom.
The transaction brings together two innovative players of the railway market with unique customer value and operational potential. Against the contribution of its mobility businesses to Alstom, Siemens will receive newly issued shares in the combined company representing 50 percent of Alstom’s share capital on a fully diluted basis. Siemens will receive warrants allowing it to acquire Alstom shares representing two percentage points of its share capital that can be exercised four years after closing.
As part of the combination, existing Alstom shareholders at the close of the day preceding the closing date will receive two special dividends: a control premium of €4 per share to be paid shortly after closing of the transaction and an extraordinary dividend of up to €4 per share to be paid out of the proceeds of Alstom’s put options for the General Electric joint ventures of approximately €2.5 billion (subject to the cash position of Alstom).
In order to ensure management continuity, Henri Poupart-Lafarge will continue to lead the company as CEO and will be a board member. Alstom’s Board of Directors would be composed of 11 members : six appointed by Siemens, the CEO and four independent board members to be designated by Alstom and agreed by Siemens (out of which three must be French citizens). The corporate name of the combined group will be Siemens Alstom.
The combined entity will offer a significantly increased range of diversified product and solution offerings to meet multi-facetted, customer-specific needs, from cost-efficient mass-market platforms to high-end technologies. The global footprint enables the merged company to access growth markets in Middle East and Africa, India, and Middle and South America where Alstom is present, and China, the United States and Russia where Siemens is present. Customers will significantly benefit from a well-balanced, larger geographic footprint, a comprehensive portfolio offering and significant investment into digital services.