Alstom SA () is a French multinational rail transport systems manufacturer. It is active in the fields of passenger transportation, rail services, signalling, and locomotives, producing high-speed, suburban, regional and urban trains along with trams.
The company and its name (originally spelled Alsthom) were formed by a merger between the electric engineering division of Société Alsacienne de Constructions Mécaniques (Als) and Compagnie Française Thomson-Houston (thom) in 1928. Significant acquisitions later included the Constructions Électriques de France (1932), shipbuilder Chantiers de l'Atlantique (1976) (sold in 2006), and parts of ACEC (late 1980s).
History
Alsthom (1928–1989)
Alsthom (at the time, with an 'h' in the word) was founded in 1928 from the merger of the French heavy engineering subsidiary of the Thomson-Houston Electric Company, the Compagnie française Thomson Houston, CFTH, and of the Société Alsacienne de Constructions Mécaniques. In 1932, Alsthom expanded into transportation by acquiring the Constructions électriques de France, Tarbes, a manufacturer of electric locomotives as well as electrical and hydraulic equipment.
In 1969, Compagnie Générale d'Électricité (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, the holding company, CGEE Alsthom, acquired ACEC Énergie (hydroturbines and electrical equipment for the nuclear industry) and ACEC Automatisme (automation) from the dissolution of the Belgian electrical engineering company Ateliers de Constructions Electriques de Charleroi. Alsthom acquired 100% of ACEC's transport division and renamed 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 aid Alsthom in selling its products outside the French market. In May of that year GEC Alsthom bought British rail vehicle manufacturer Metro-Cammell.
thumb|A [[British Rail Class 373|Class 373 train at London St Pancras. The class 373 was built by Alstom in the early to mid-1990s for the Eurostar high-speed service from England to France and Belgium.]]
thumb|250x250px|[[Alstom Metropolis train running on the Kochi Metro built in 2017]]
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.
Alstom (1999–2014)
alt=WMATA Alstom 6000 series|thumb|[[Washington Metro 6000 series railcars built by Alstom in 2006]]
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 to General Electric its heavy-duty gas turbine business (GE license design) The next year, the company bought out ABB's share in the former joint venture 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, 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. The European Commission objected to a €3.2 billion rescue plan involving the French state; European Union competition law bans most state aid without EC permission. This was obtained, but required Alstom to sell several of its subsidiaries, including its shipbuilding and electrical transmission assets.
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. In 2010, Alstom re-acquired the electric power transmission division of Areva.
In 2005, the former Metro-Cammell rail vehicle works in Washwood Heath closed. In the same year, Alstom sold its Australian subsidiary, Alstom Transport Australia and New Zealand, to United Group, which became part of the latter's UGL Rail division. Alstom would restart its manufacturing operations in Australia by the early 2010s.
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 year, Bouygues elected to increase its shareholding in the firm to 24%.
thumb|Alstom-Ecotècnia wind turbines in Spain
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 a 25% stake in the Russian locomotive manufacturer Transmashholding. Six years later, Alstom decided to increase its shareholding in Transmashholding to 33% at a reported cost of €54 million. As a consequence of an alignment agreement between Transmashholding and another entity, LocoTech-Service, Alstom's stake in the former decreased to 20% in August 2018.
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).
Also in 2012, the company formed a joint venture with RusHydro to manufacture hydropower equipment for small and medium power hydropower plants (up to about 100 MW).
Late in 2012, to further the development of its tidal energy business, Alstom acquired Tidal Generation Ltd from Rolls-Royce, however this was later sold to GE in 2015 as part of the sale of Alstom's energy business.
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 investigations
Starting in 2009, Alstom's practices were questioned by the United States Department of Justice (DOJ) on the basis that they 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's commercial practices, focusing on a 2003 deal in Indonesia valued at $118 million in particular.
On 13 April 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 and was imprisoned in a high security 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 DOJ, 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. In December 2018, three executives of Alstom were found guilty of conspiracy to corrupt following an investigation by the SFO into allegations of several Lithuanian politicians and officials being offered bribes in return for securing contracts.
In February 2020, the United Nations published a database of all business enterprises involved in certain specified activities related to the Israeli settlements. Alstom has been listed on the database in light of its involvement in activities related to "the provision of services and utilities supporting the maintenance and existence of settlements" and "the use of natural resources, in particular water and land, for business purposes".
Sale of energy businesses 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. Siemens and Alstom had a greater product overlap and thus a greater risk to jobs, along with potential issues with EU competition regulators. Siemens' offer was characterised as "defensive", being skeptically received by investors and analysts.
On 29 April, Reuters reported that Alstom's board had accepted a €10 billion bid by GE for its energy division; In a letter from GE executive Jeffrey R. Immelt to President François Hollande published in Les Echos, Immelt gave assurances about continued investment in Alstom's French activities, the security of the civil nuclear sector, and on job commitments made by Alstom Wind, whilst making its wind activities available to investors. On 30 April, Alstom confirmed that an offer for its power and grid divisions (representing an equity value of €12.35 billion, €11.4 billion enterprise value) was under review with key interests including the French state. On 30 April, GE confirmed it had made a $16.9 billion offer, comprising a $13.5 billion value plus $3.4 billion cash. On 5 May, GE offered to buy one-fourth of the shares in Alstom's Indian power and distribution companies – Alstom T&D India and Alstom India – at 261.25 and 382.20 rupees a share (value US$278 million and $111 million respectively) subject to its bid for Alstom SA being successful.
On 5 May 2014, the French government stated it did not back GE's bid, citing concerns on the future of Alstom's rail division as a smaller separate entity, suggesting that GE transfer its own rail division to Alstom; other concerns were over the civil nuclear field's national independence, and French jobs. On 14 May, France issued a decree (Décret n° 2014-479 du 14 mai 2014.), nicknamed "décret Alstom", extending to power of the state to veto the takeover of "strategic interests" into areas of energy supply, water, transport, telecoms and public health.
On 16 June, Siemens and Mitsubishi Heavy Industries (MHI) submitted a competing offer for Siemens to acquire Alstom's gas turbine activities for €3.9 billion while MHI would form joint ventures with Alstom, acquiring 40%, 20% and 20% stakes in Alstom's steam and nuclear, electrical grid, and hydroelectric businesses respectively, for €3.1 billion. The proposal included an offer to buy a further 10% stake from shareholder Bouygues and an option to form a rail transport joint venture. On 19 June, GE revised its bid, matching the same price with a lower cash transaction value; it also proposed forming a joint venture of their renewable, electric grid, steam turbine and nuclear power businesses. GE announced a memorandum of understanding between the two firms in the rail sector and the sale of GE's rail signalling unit to Alstom. On 20 June, Siemens and MHI modified their bid, with MHI increasing its stake in Alstom's steam, hydro, and grid businesses to 40% in all three (total €3.9 billion) while Siemens increased its offer by €400 million to €4.3 billion. Subsequently, Economy minister Arnaud Montebourg stated he would block both bids, but the French government backed GE's offer and had given GE more specifications on commitments and guarantees; it also intended to buy two-thirds of Bouygues' shareholding (20%). The next day, Alstom's board backed GE's revised bid. On 22 June, the French state agreed terms with Bouygues, buying a 20% stake in Alstom from Bouygues at a 2–5% discount on a minimum value of ≈€35 per share.