HS2

18.02.20

Alstom to take over Bombardier

Alstom, French multinational company who operate worldwide in rail transport markets, are set to take over Canadian train producer Bombardier.

Bombardier has numerous rail-related sites in Britain, in particular its Derby factory where 2,000 people are employed. The company also has several maintenance depots in the country which it operators on behalf of train operators.

Alstom said, in a statement issued last night, it had: “...signed a Memorandum of Understanding with Bombardier Inc. and Caisse de dépôt et placement du Québec in view of the acquisition of Bombardier Transportation. Post-transaction, Alstom will have a backlog of around €75bn and revenues around €15.5bn. The price for the acquisition of 100 per cent of Bombardier Transportation shares will be €5.8bn to €6.2bn, which will be paid via a mix of cash and new Alstom shares.”

An Extraordinary General Meeting will have to take place in order to approve the takeover by the end of October this year, but at least one large Alstom shareholder has already indicated that it will agree to the deal.

The transaction will also need to be approved by regulators, but Alstom said it expected the deal to be completed in the first six months of the year.

Chairman of Alstom and CEO of Henri Poupart-Lafarge said: “I’m very proud to announce the acquisition of Bombardier Transportation, which is a unique opportunity to strengthen our global position on the booming mobility market. This acquisition will improve our global reach and our ability to respond to the ever-increasing need for sustainable mobility.

“Bombardier Transportation will bring to Alstom complementary geographical presence and industrial footprint in growing markets, as well as additional technological platforms. It will significantly increase our innovation capabilities to lead smart and green innovation.

“We will be thrilled to welcome all the talent and energy of Bombardier Transportation employees. We are deeply committed to step up the turnaround of Bombardier Transportation activities and deliver significant value to all stakeholders, particularly our customers.”

Alain Bellemare, President and Chief Executive Officer of Bombardier said: “Today marks an exciting new chapter for Bombardier. Going forward, we will focus all our capital, energy and resources on accelerating growth and driving margin expansion in our market-leading $7.0 billion business aircraft franchise. With a stronger balance sheet after the completion of this transaction, an industry-leading portfolio of products, a strong backlog, and a rapidly growing aftermarket business, we will compete in this market from a position of strength.

"Selling the rail business will allow us to reshape and redefine our capital structure. Adding a substantial amount of cash to the balance sheet, and removing la Caisse preferred equity in Transportation, will change the game for Bombardier.

“Including expected proceeds from previously announced transactions, Bombardier would have between $6.5 and $7.0 billion of pro forma1cash on hand, putting the Company on a brand-new footing to address its $9.3 billion of debt." 

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