Bombardier finalises price for its rail business

Bombardier Inc. has moved forward in the negotiations with Alstom over the future of its rail business. The Canadian company will sell its transport division to the French manufacturer for around 7.45 billion euros. At the same time, the Caisse de dépôt et placement du Québec, the co-owner of Bombardier Transportation, will retire from this business and will become the shareholder of Alstom.

Following several weeks of talks and discussions, Bombardier Inc. and Alstom have concluded a memorandum of understanding on Monday, 17 February. The Caisse de dépôt et placement du Québec which owns Bombardier Transportation together with Bombardier Inc. also participates in this agreement. According to the document, the parties agreed on the price for the Bombardier’s rail business at a level of 8.2 billion US dollars (around 7.45 billion euros).

Taking into account the debt-like items and transferred liabilities, the revenue will be around 6.4 billion dollars (over 5.8 billion euros). Bombardier Inc. will receive 4.2-4.5 billion US dollars (3.8-4.1 billion euros) and the Caisse de dépôt et placement du Québec 2.1-2.3 billion US dollars (1.9-2.1 billion euros). The deal will be completed in the first half of 2021 after negotiations with Works Councils of Alstom and Bombardier as well as issuing an approval by the regulatory bodies.

New shareholders of Alstom

After implementing the deal, Alstom’s ownership structure will change. The French rolling stock manufacturer will get the new shareholders. According to Bombardier Inc., the Caisse de dépôt et placement du Québec will become the largest shareholder of Alstom. However, it did not report the exact share. Bombardier Inc., in its turn, will also receive Alstom shares for the amount of 550 million US dollars (around 500 million euros).

As of today, 94 per cent of Alstom’s shares are owned by the institutional investors, 5 per cent by individual investors and 1 per cent by employees. French industrial group Bouygues is the current largest shareholder of Alstom with a share of 15 per cent. Among other institutional shareholders are Fidelity Management & Research, Amundi Asset Management, The Vanguard Group, Oddo BHF Asset Management, Aviva Investors France, Ostrum Asset Management, BNP Paribas Asset Management France, Wellington Management, Templeton Global Advisors.

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Author: Mykola Zasiadko

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

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