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Canada’s Bombardier Inc (BBDb.TO) missed out on a merger of its rail unit with Germany’s Siemens (SIEGn.DE) because of a reluctance by Siemens to cede control of its business, allowing France’s Alstom (ALSO.PA) to clinch a deal with the German firm, with help from new French president Macron, three sources close to the negotiations told Reuters.
Siemens and Alstom announced a merger of their train manufacturing operations on Tuesday, leaving Bombardier competing in a market dominated by China’s state-owned CRRC Corp (601766.SS), the world’s largest train maker. The combined Siemens and Alstom group will become the second biggest.
The deal gave Siemens 50 percent in the new group, plus a few shares of the joint venture, while Alstom will supply Henri Poupart-Lafarge as chief executive.
In the talks between Bombardier and Siemens, both “wanted to be in the driver seat”, complicating the negotiations, one of the sources said.
Another source said Siemens felt uncomfortable with Bombardier’s nearly $9 billion debt, adding the Canadian company’s financial woes caused “big headaches” at Siemens.
Bombardier, which considered bankruptcy in 2015, has received more than $1 billion in federal and provincial government aid since 2015.
The Siemens-Alstom deal also had the blessings of French politicians, despite France losing control of the manufacture of its high-speed TGV train, a symbol of national pride that has highlighted French engineering skill, the people added.
Siemens and Alstom declined comment.
Bombardier declined to comment on the deal but said it “has the scale, the technology and the people to compete and win in any competitive landscape.”
This article first appeared on www.reuters.com
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