Alstom to buy Bombardier rail unit

Business | Written by : IANS| Updated:

Alstom to buy Bombardier rail unit

Paris, Feb 18 (IANS) French train maker Alstom announced on Monday that it had reached a deal with Canadian train and plane maker Bombardier for the acquisition of its rail unit, Bombardier Transportation.

"The price for the acquisition of 100 percent of Bombardier Transportation shares will be 5.8 billion to 6.2 billion euros, which will be paid via a mix of cash and new Alstom shares," Alstom said in a press release.

The French company said a memorandum of understanding had been signed and the deal is "a unique opportunity to strengthen our global position on the booming mobility market", the Xinhua news agency reported.

Bombardier ended the past financial year deep in the red. Its Berlin-based rail unit, Bombardier Transportation, is 32.5 per cent owned by the Caisse de depot et placement du Quebec (CDPQ).

After the transaction, which is expected to close in the first half of 2021, CDPQ will become a major shareholder in Alstom with around 18 per cent stake.

French Finance Minister Bruno Le Maire welcomed the deal. It "will allow Alstom to prepare for the future, against the backdrop of increasingly intense international competition," he said in a statement.

A merger between Alstom and German rail manufacturer Siemens was blocked by European regulators last year on competition grounds. French media said the deal with Bombardier will face less opposition from regulators.