Latham and Cleary advise as Siemens and Alstom combine
US law firms took the lead as Siemens agreed to combine its transport operations with former rival Alstom in a merger of equals to counter the threat from China to the European railway industry.
Latham & Watkins and Cleary Gottlieb Steen & Hamilton advised on the €15bn (£13.1bn) Franco-German deal between the industrial group and the transport company.
Freshfields Bruckhaus Deringer was also involved, as the two European companies reacted to the challenges posed by China’s state-owned CRRC, the largest rolling stock manufacturer in the world. Siemens and Alstom hope to form a larger competitor to CRRC that will be by some distance the number-two company in the market.
Joe Kaeser, president and chief executive of Siemens, said the deal will create ‘a new European champion in the rail industry for the long term’.
A corporate team led by Latham Paris partner Patrick Laporte and including Pierre-Louis Cléro in France and Rainer Traugott in Munich acted for Siemens, which will merge its mobility division with Alstom and take a 50% stake in the company in newly issued shares. The remainder will stay in the hands of Alstom’s public shareholders.
Latham also advised the German conglomerate on tax, employment, IT, due diligence and regulatory matters through partners Xavier Renard, Thomas Fox, Matthias Rubner, Claudia Heins, Tobias Leder and Hugues Vallette Viallard. In total, 62 of its lawyers were involved in the deal, with negotiations taking around three months.
Siemens is a longstanding client of Latham, with the firm recently advising it on its $4.5bn acquisition of US-based software provider Mentor Graphics.
‘We have an excellent and unique track record in mergers of equals, so we were the natural choice for Siemens on this deal,’ said Laporte. ‘The two companies have very complementary operations.’
Freshfields’ Frank Montag and Thomas Wessely led a team advising Siemens on competition and merger control aspects.
Led by partners Pierre-Yves Chabert and Charles Masson, Cleary acted for Alstom on corporate, tax, IP and antitrust matters. The French company’s chief executive will lead the new group.
French-listed Siemens Alstom will be worth €15.3bn (£13.4bn) in revenue and employ 62,300 people in more than 60 countries. Its global headquarters will be located in the Paris area, while its transport technology business will sit in Berlin. Alstom is present in the Middle East, Africa, India, Central and South America, while Siemens is notably strong in China, the US and Russia.
Laporte concluded: ‘We will see more and more mergers of equals between European players in future, due to the size and the global footprint of the market and the pressure from big players in China and the US.’