Alstom Transport

Alstom SA is a French multinational rolling stock manufacturer operating worldwide in rail transport markets, active in the fields of passenger transportation, signalling, and locomotives, with products including the AGV, TGV, Eurostar, Avelia and New Pendolino high-speed trains, in addition to suburban, regional and metro trains, and Citadis trams.

Alsthom (originally Als-Thom) was formed by a merger between Compagnie Française Thomson-Houston and the electric engineering division of Société Alsacienne de Constructions Mécaniques in 1928. Significant later acquisitions included the Constructions Electriques de France (1932), shipbuilder Chantiers de l'Atlantique (1976), and parts of ACEC (Belgium, late-1980s).

A merger with parts of the General Electric Company (UK) formed GEC Alsthom in 1989. Throughout the 1990s, the company expanded its holdings in the rail sector, via the acquisition of German rolling stock manufacturer Linke-Hofmann-Busch and Italian rail signalling specialist Sasib Railways. In 1998, GEC Alsthom was floated on the Paris Stock Exchange and, later that year, it was rebranded Alstom.

In 2003, the company required a €3.2 billion state-backed bailout from the French government. As a result, Alstom was compelled to dispose of several of its divisions, including shipbuilding and electrical transmission to Nikhanj Power, in order to comply with European Union rules on state aid. It was able to re-acquire its electric transmission division in 2010.

In 2004, Alstom was again in financial difficulties, having incurred massive unexpected costs (€4 billion) arising from a design flaw inherited from the acquisition of ABB Group's turbine business, in addition to losses in other business sectors.

In 2014, Alstom and General Electric (GE) announced that a US$17 billion (€12.4 billion) bid for Alstom's power and grid divisions had been made and provisionally accepted. Amid controversy in France over the proposed takeover of strategic domestic interest by a foreign company, GE's bid was modified to include joint ventures in power generation and transmission, as well as GE's rail signalling business being sold to Alstom. The acquisition of the power and grid division by GE was accepted by EU and US competition authorities in 2015, subject to Alstom's heavy gas turbine business being sold to Ansaldo Energia. The sale of Alstom's power generation and transmission businesses to GE was finalised on 2 November 2015, since then, the Alstom Group has been operating solely in the rail sector.

In late-2017, Alstom announced a proposed merger with Siemens Mobility of Germany. However, in February 2019, the European Commission prohibited the merger. Subsequently, in February 2020, the company signed a letter of agreement to purchase Bombardier Transportation. The purchase was finalized on 29 January 2021 and Bombardier's Transportation business became a part of Alstom.

History

Alsthom (1928–1989)

Alsthom was founded in 1928 from the merger of French heavy engineering interests of the Thomson-Houston Electric Company (then part of General Electric) – the ''Compagnie française pour l'exploitation des procédés Thomson Houston'' (or Compagnie Française Thomson Houston, CFTH) and Société Alsacienne de Constructions Mécaniques, with the first factory in Belfort. In 1932, Alsthom expanded into transportation by acquiring Constructions Electriques de France, Tarbes, a manufacturer of electric locomotives as well as electrical and hydraulic equipment.

In 1969, Compagnie Générale d'Electricité (CGE) became the majority shareholder of Alsthom. In 1976, Alsthom merged with Chantiers de l'Atlantique, becoming Alsthom Atlantique. Thus, the business expanded into marine. The next year, it constructed the first 1300 MW generator set for the Paluel Nuclear Power Plant, setting a world record with an output of 1500 MW.

In 1978, Alsthom delivered its first TGV to SNCF. The TGV went on to break world rail speed records in 1981 (at ) and in 1990 (at ). It also set the world endurance record for high-speed train lines in 2001, travelling the from Calais to Marseille in 3 hours and 29 minutes. In 1986, Alsthom Belfort received an order from EDF for the largest gas turbine in the world (212 MW).

In 1988–89, holding company CGEE Alsthom acquired ACEC Energie (hydroturbines and electrical equipment for the nuclear industry) and ACEC Automatisme (automation) from the dissolution of Belgian electrical engineering company ACEC. Alsthom acquired 100% of ACEC's transport division, renaming it ''ACEC Transport''.

GEC Alsthom (1989–1998)

In early 1989, GEC Alsthom was formed from a 50–50 merger of Alsthom and the Power Systems Division of the British General Electric Company; for Alsthom this move was intended to allow Alsthom to more successfully sell its products to export customers outside the French market.International Directory of Company Histories (1994) In May of that year, British rail vehicle manufacturer Metro-Cammell was acquired.

During the early 1990s, GEC Alsthom was the principal manufacturer of the British Rail Class 373, a variant of their TGV family specially designed for traversing the Channel Tunnel between the UK and France. Although collectively operated by Eurostar, the type was ordered by three different railway companies: 16 by SNCF, four by NMBS/SNCB, and 18 by British Rail, of which seven were shortened ''North of London'' sets. The first Class 373 set was completed at GEC Alstom's Belfort facility during 1992.

In 1994, GEC Alsthom acquired a 51% shareholding in Linke-Hofmann-Busch from Salzgitter AG. In 1995, the company acquired the remaining shares in the steam turbine manufacturer MAN Energie. In early 1998, GEC Alsthom acquired the electrical contractor Cegelec, renaming it ''Alstom Power Conversion''.

In 1998, GEC Alsthom bought Italian firm SASIB's rail signalling subsidiary ''Sasib Railways'', which included the former General Railway Signal (USA).

In June 1998, GEC Alsthom was listed on the Paris Stock Exchange; both GEC and Alcatel elected to sell off part of their stakes (23.6% each). Around this time, the company was officially renamed ''Alstom''. Retained by Alstom, the former Metro-Cammell works in Washwood Heath were closed in 2005.Alstom withdraws from train assembly in British ''International Railway Journal'' July 2003 page 4

Alstom (1999–2014)

In 1999, Alstom bought half of ABB's power systems division, forming a 50-50 joint company known as ABB Alstom Power. Alstom also bought Canada's Télécité, a passenger information and security solutions company, and sold its heavy-duty gas turbine business to General Electric. The next year, it bought out ABB's share in ABB Alstom Power.

In 2000, Alstom sold its diesel engine businesses ( Ruston, Paxman, and Mirrlees Blackstone) to MAN Group. It also acquired a 51% stake in Italian rail manufacturer Fiat Ferroviaria, a world leader in tilting technology. In April 2003, Alstom sold its industrial turbine business to Siemens for €1.1 billion.

By 2003, Alstom was facing a financial crisis caused by a mix of poor sales and over $5 billion of debt liabilities; it reportedly had the potential to force the company's liquidation. These heavy debts were largely due to a $4 billion charge over a design flaw in a turbine developed by ABB Group, acquired by Alstom in 2000, as well as the collapse of customer Renaissance Cruises amid a general downturn in the marine market. Alstom's share price had dropped by 90% over two years. European competition commission law required Alstom to sell several of its subsidiaries, including its shipbuilding and electrical transmission assets, when it accepted a €3.2 billion rescue plan involving the French state.

In 2004, the French state took a 21% stake in Alstom for €772 million and Alstom received an EU-approved bailout worth in total €2.5 billion. The company sold its electrical transmission and distribution ("grid") activities to Areva, the diesel locomotive manufacturer Meinfesa to Vossloh, and Alstom Power Rentals to APR LLC. That same year, Alstom delivered the four Mermaid propulsion units, each capable of providing up to 21.5 MW of power, to shipping company Cunard to power ''Queen Mary 2'', the world's largest ocean liner.

In 2005, the former Metro-Cammell rail vehicle works in Washwood Heath, closed.

In 2006, Alstom sold its Marine Division to the Norwegian group Aker Yards, with a commitment to retain 25% of the shares until 2010; it also sold Alstom Power Conversion, which became Converteam, in a leveraged buy-out deal funded by Barclays Private Equity France SAS. In June 2006, Bouygues acquired the French government's 21% holding in Alstom for €2 billion. Later that same year, Bouygues elected to increase its shareholding in the firm to 24%.

In 2007, the TGV POS set the world speed record for rail vehicles of . In March, Alstom acquired ''Power Systems Manufacturing LLC'' (Florida, USA) a manufacturer of gas turbine components from Calpine Corporation for $242 million. In June, Alstom acquired the Spanish wind turbine manufacturer Ecotècnia, renamed as Alstom Ecotècnia (since 2010 Alstom Wind). The company also adopted a new graphic chart (logo, corporate identity) using "alstom" as its trading name, reserving "Alstom SA" for legal documents.

In 2009, Alstom acquired 25% of Russia's Transmashholding.

In 2010, Alstom re-acquired the electric power transmission division of Areva SA, which had previously been sold in 2004.

In 2011, Alstom and the Iraqi government signed a memorandum of understanding regarding the construction of a new high-speed rail line between Baghdad and Basra.

In 2012, Alstom opened construction of factories at Sorel-Tracy, Quebec, Canada (passenger rail vehicles). After a consortium of Alstom (Alstom Wind), EDF, and DONG Energy was awarded three major French offshore wind farm contracts, the company initiated construction of factories at Cherbourg-en-Cotentin (turbine blades in association with LM Power, also wind turbine towers) and Saint-Nazaire (Nacelles and generators).
In 2012, the company forms a joint venture with RusHydro to manufacture hydropower equipment for small and medium power hydropower plants. (up to about 100MW.)

In November 2013, Alstom announced it planned to raise €1 to €2 billion through sale of some non-core assets, plus the possible sale of a stake in Alstom Transport, and cut 1,300 jobs. In 2014, Alstom sold its steam auxiliary components activities (air preheaters and gas-gas heaters for thermal power, other industrial heat transfer equipment, and grinding mills) to Triton Partners for €730 million.

In November 2014 Alstom was awarded a $429.4 million contract to modernise 85 trains for the Mexico City metro system.

Judicial troubles

Starting in 2009, Alstom's practices are questioned by the United States Department of Justice (DOJ), which violated the 1977 Foreign Corrupt Practices Act. This American law has extraterritorial scope. At the time, Alstom seemed to cooperate with the proceedings.

In 2010, the DOJ opened an investigation into Alstom commercial practices, especially on a 2003 deal in Indonesia worth 118-million dollars.

On April 13, 2013, Alstom senior executive Frédéric Pierucci was arrested at the John F. Kennedy International Airport in New York. He was accused of willful blindness of his company's suspected corruption. He was imprisoned in a high security prison facility for 14 months and denied release on bail until the week of Alstom's acquisition by the US conglomerate General Electric.

In late-2014, Alstom was fined $772 million by the United States Department of Justice, and admitted guilt (under the Foreign Corrupt Practices Act) in relation to bribes paid to obtain contracts in various countries.

In mid-2014, Alstom Network UK was charged by the UK Serious Fraud Office (SFO) in relation to corruption offences alleged to have been committed when obtaining transportation contracts in India, Poland and Tunisia, covered under sections 1 of the Prevention of Corruption Act 1906 and Criminal Law Act 1977. Further charges were brought in late 2014 by the SFO in relation to corrupt practices used to obtain energy contracts in Lithuania. Additional charges relating to contracts for the Budapest Metro in Hungary were added in April 2015.

Sell-off to General Electric

On 24 April 2014, unconfirmed reports claimed that US conglomerate General Electric (GE) was in acquisition talks with Alstom for $13 billion with the support of 29%-shareholder Bouygues, causing Alstom's share price to rise 18% in one day. On 27 April, Le Figaro reported that a rival 'cash plus asset swap' offer was issued by Siemens, trading Alstom's power business for part of its rail arm, plus a cash offer as good as GE's and job guarantees. Siemens' bid was reportedly promoted by French economic minister Arnaud Montebourg