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Alstom proceeds with Bombardier rail acquistion

Deal with France-based manufacturer will be finalized in early 2021
Thunder Bay Bombardier plant
Thunder Bay Bombardier plant (Company photo)

French train manufacturer Alstom is acquiring Bombardier's rail business at a marked down price.

Bombardier, now primarily a luxury business jet-maker, announced Sept.16 that it has signed a definitive sale and purchase agreement with Alstom SA and the minority investor Caisse de dépôt et placement du Québec for the sale of its train-making (transportation division) business to Alstrom.

Bombardier and la Caisse will sell their interests in Bombardier Transportation to Alstom for an enterprise value of US$8.4 billion (EUR 7.15B), a $350 million (EUR 300M) price reduction than what was stated in a previous memorandum of understanding in February.

Enterprise value is the value of the business plus outstanding debt.

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Bombardier said it will use the proceeds to improve balance sheet and address a looming debt.

A news release said it's offset by the impact of a more favourable currency exchange rate. The sale is expected to close in the first quarter of 2021 Bombardier Transportation operates a rail coach manufacturing division in Thunder Bay.

“Today’s announcement marks a significant milestone towards achieving our near-term priorities and repositioning Bombardier as a pure-play business jet company,” said Éric Martel, Bombardier's president-CEO.

"The proceeds from this transaction will allow us to begin reshaping our capital structure and start addressing our balance sheet through debt paydown, so that we can achieve the full potential of our incredibly talented employees and our industry leading business jet portfolio.”

Montréal-headquartered Bombardier has operations in 25 countries in aviation and rail transportation.




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