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Alstom now entirely focused on rail industry

Alstom is now entirely focused on rail transport after having sold the remainder of its energy activities to GE today (2 November).

The French manufacturer first stated that it would invest in strengthening its transport division after selling energy activities in May of last year.

But in June the bid became a “win-win deal” after GE (General Electric) offered to sell its rail signalling operations to Alstom to head-off a counter proposal by Siemens.

As a result, proceeds of its energy asset sale are being used to acquire signalling activities for around €700m, as well as to reinvest in three joint ventures with GE for around €2.4bn.

The purchase of GE’s signalling activities will help strengthen Alstom’s position as one of the global leaders in the rail industry, it said. The GE signalling business – a “leading provider of on-board and wayside signalling systems” – has 1,200 employees and its acquisition will open the freight signalling market to Alstom.

Its chair and CEO, Patrick Kron, said: “Today represents a major milestone in Alstom’s history. We managed to secure a win-win deal with GE, 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.”

Alstom has a strong track record in the UK rail industry, most recently including the renewal of its Northern Line contract for the Underground. Its most famous UK fleet is the Pendolinos on the West Coast Main Line, though it has extensive railway systems, electrification and infrastructure capability too, being involved (either directly or in joint ventures) on Crossrail, Edinburgh to Glasgow electrification and HS1, for example. Earlier this year it bought out Balfour Beatty’s 50% share in Signalling Solutions, of which it is now sole owner.

Alstom’s links with GE go back to the founding of the company in the late 1920s – Thomson-Houston Electric Company, whose heavy engineering interests were merged with SACM’s electrical engineering division to found Alsthom (as it was then known), was part of GE.

(Top image c. Thibault Camus, AP Photo)