Siemens and Alstom have signed a Memorandum of Understanding to combine Siemens' mobility business including its rail traction drives business, with Alstom.
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The two businesses are largely complementary in terms of activities and geographies.
Siemens will receive newly issued shares in the combined company representing 50 percent of Alstom's share capital on a fully diluted basis.
The new entity will benefit from an order backlog of €61.2 billion, revenue of €15.3 billion, an adjusted EBIT of €1.2 billion and an adjusted EBIT-margin of 8.0 percent, based on information extracted from the last annual financial statements of Alstom and Siemens.
In a combined setup, Siemens and Alstom expect to generate annual synergies of €470 million latest in year four post-closing and targets net-cash at closing between €0.5 billion to €1.0 billion.
Global headquarters as well as the management team for rolling stock will be located in Paris area and the combined entity will remain listed in France.
Headquarters for the Mobility Solutions business will be located in Berlin, Germany. In total, the new entity will have 62,300 employees in over 60 countries.
As part of the combination, Alstom existing shareholders at the close of the day preceding the closing date, will receive two special dividends.
The first is a control premium of €4.00 per share (in total = €0.9 billion) to be paid shortly after closing of the transaction.
The second is an extraordinary dividend of up to €4.00 per share (in total = €0.9 billion) 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.
Siemens will receive warrants allowing it to acquire Alstom shares representing two percentage points of its share capital that can be exercised earliest four years after closing. ■
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