Alstom bids a price for Bombardier rail unit

Alstom has appraised the rail business of Bombardier at 7 billion dollars (around 6.5 billion euros). This price, as some media report, was offered by the French rolling stock manufacturer for the first time. However, this amount could be lowered after the weekend’s meeting of the Alstom’s board.

“According to our information, Alstom had made for the first time a non-binding offer for the transportation division of Bombardier at a value of 7 billion dollars,” the French title BFM Business reports with a reference to its anonymous sources. The mentioned price is not the final and, as the French media says, it could be less. For this weekend, a meeting of the Alstom’s board is scheduled, and the price will be the key point to discuss on it. “A board of directors must be held at the end of the week to make a second offer whose price will be lower than the initial one,” BFM Business adds.

Main question

If the deal between Alstom and Bombardier is completed successfully, the French rolling stock manufacturer will strengthen its position in the worldwide railway market and will be able to compete more sufficiently with the Chinese giant of CRRC. “After the failure of the Alstom-Siemens merger, (a deal) would be a good strategic rebound for Alstom,” Reuters quotes the words of its source familiar with the affair.

However, the main question is still without an answer in this case. This is the decision of the European antitrust authorities. Despite the parent company Bombardier Inc. is based in Canada, its rail business is headquartered in Berlin, Germany, and has the manufacturing and maintenance facilities all over Europe. As a result, this deal will be under the scrutiny of European Commissioner for Competition Margrethe Vestager.

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Author: Mykola Zasiadko

Mykola Zasiadko is editor of online trade magazines RailTech.com and RailFreight.com.

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