Alstom buys Bombardier Transportation for a lower price than estimated
Alstom announced Friday that it signed the sale and purchase agreement with Bombardier and Caisse de dépôt et placement du Québec (CDPQ) for the acquisition of Bombardier Transportation with a revised price term.
According to Alstom the terms of the agreement have been adapted to the current situation. A 300 million euros reduction in the price range has been agreed with Bombardier Inc and CDPQ. Excluding any further downward adjustments linked to the net cash protection mechanism, the price range for the acquisition of 100 percent of Bombardier Transportation shares will be therefore 5.5 billion to 5.9 billion euros.
Alstom considers that the proceeds are likely to amount up to 5.3 billion euros, based on estimated potential post-closing adjustment and obligations linked to the net cash protection mechanism, compared to the 5.8 billion – 6.2 billion euros range that was communicated in February of this year.
“The acquisition of Bombardier Transportation represents a transformational change for Alstom. It will enable the Group to accelerate on its strategic roadmap and strengthen its leadership in the context of a dynamic market, at a time where sustainable transportation is at the heart of the global agenda” said Henri Poupart-Lafarge Chairman and CEO of Alstom.
“Bombardier Transportation will bring to Alstom complementary geographical presence to broaden Alstom’s commercial reach in key growing markets, strong product complementarities in rolling stock, strategic scale in services and signalling, industrial capacity in key countries, a leading portfolio offering and additional R&D capabilities to invest in green and smart innovation. Alstom will also welcome new talent and expertise, with the arrival of Bombardier Transportation employees.”
The financing structure will remain the same, especially the size and terms of the rights issue and the reserved capital increases of CDPQ and Bombardier Inc. CDPQ will become the largest shareholder of Alstom with approximately 18 precent of the share capital and voting rights.
Alstom is convinced of the strong strategic rationale for the acquisition and is confident in its ability to recover Bombardier Transportation’s commercial, operational and profitability potential. Alstom confirms its objectives to deliver 400 million run rate cost synergies in year four to five and to restore Bombardier Transportation margin towards standard level in the medium term.
Alstom’s Board of Directors approved these new terms and is confident in Alstom’s capacity to deliver strong value creation for all stakeholders through this acquisition.
Following positive progress on antitrust regulation process, the closing of the transaction is now expected for Q1 2021 subject to regulatory approvals and customary closing conditions, with an extraordinary shareholders’ meeting to be held on October 29th 2020.