Bloomberg News

Alstom May Look at Rail Acquisitions, Chief Executive Kron Says

November 07, 2011

Nov. 4 (Bloomberg) -- Alstom SA, a French maker of power equipment, may consider acquisitions to boost its rail business, though it will focus on expanding existing operations, Chief Executive Officer Patrick Kron said.

“We may look here and there to some possible acquisitions,” Kron told Bloomberg Television’s “On the Move” with Francine Lacqua today. He has previously expressed interest in expanding in rail-signaling systems. “There is nothing serious that is to come short term. Our base scenario is organic growth.”

Finmeccanica SpA Chief Executive Officer Giuseppe Orsi said in September that there’s interest from potential bidders in that company’s AnsaldoBreda train-making unit. Finmeccanica is in talks to combine AnsaldoBreda with Construcciones & Auxiliar de Ferrocarriles SA, Il Mondo reported Oct. 28, without saying where it got the information.

The French company had 2.75 billion euros ($3.8 billion) of cash and short-term investments as of March 31.

Alstom, which competes with train- and tram-builders such as Siemens and Canada’s Bombardier Inc., bought a 25 percent stake in Russian trainmaker Transmashholding this year and is building a subway factory in India to expand in emerging markets.

The French company announced plans to cut 1,380 jobs in March at its transport unit in Germany, Spain and Italy because of sluggish demand in European rail markets.

Sales at its transport unit fell 16 percent to 2.46 billion euros in the six months ended in September from a year earlier, Alstom said yesterday. Orders rose 33 percent to 2.67 billion euros, led by contracts in Russia and Eastern Europe.

--Editors: Thomas Mulier, Jerrold Colten

To contact the reporter on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net.

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.


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