Alstom SA to acquire Bombardier Transportation for US$8.2 billion

Bombardier confirmed Monday it has come to an agreement with Alstom SA to sell off its transportation unit to the French company, which includes its rail industry and train division, for US£8.2 billion (EUR7.45 billion). The agreement narrows Bombardier's focus as the plane-and-train maker commits itself solely to business jets while casting off its largest division in part to help pay down US£9.3 billion in debt. The acquisition also signals an effort by Alstom to scale up amid rising competition from China's state-owned CRRC, the world's largest train maker.

"Going forward, we will focus all our capital, energy and resources on accelerating growth and driving margin expansion in our market-leading £7 billion business aircraft franchise," said Bombardier President and CEO Alain Bellemare. Bombardier says the transaction will see Quebec pension giant Caisse de depot et placement, which owns a 32.5 per cent stake in Bombardier's train division, become Alstom's largest shareholder. Bombardier says net proceeds from the deal will be between US£4.2 billion and US£4.5 billion after deducting the Caisse's equity position of roughly US£2.2 billion, as well as adjustments for debts and other liabilities.

The deal is expected to close in the first half of 2021 if it can move through regulatory hurdles. "We are confident that the sale of our rail business to Alstom is the right action for all stakeholders," Bellemare stated. "Above all, they recognize our talented and passionate employees and the great work they have done." Alstom noted Monday it hopes to further develop its presence in Quebec, with Montreal becoming what it calls the headquarters of Alstom of the Americas.

"We are deeply committed to step up the turnaround of Bombardier Transportation activities and deliver significant value to all stakeholders," said Henri Poupart-Lafarge, Alstom chairperson and CEO. "We will also further develop Bombardier Transportation's historical presence in Quebec, drawing on Quebec's well-established strengths in innovation and sustainable mobility."  Rumours had been swirling for weeks around whether or not Bombardier, which is trying to reduce its heavy debt, would sell its train division. This is the latest of many assets relinquished over the past five years by Bombardier's CEO, including the Q400 turboprop aircraft[1], CRJ regional jets[2] and the former C-Series[3].

Nevertheless, any deal is expected to come under intense scrutiny from antitrust regulators in the European Union. Last year, EU authorities blocked a proposed merger between Alstom and the train division of German industrial conglomerate Siemens AG, arguing the proposed tie-up would result in higher price tags on signalling systems and bullet trains.  The Quebec company has been dragging a long-term debt of US £9.3 billion and had announced last month that it was studying options to accelerate its deleveraging[4].

Unlike the aeronautics division, Bombardier Transportation's head office is located in Berlin, Germany -- making it much less present in Quebec. It has 40,650 employees worldwide with 1,000 people at the La Pocatiere plant in Bas-Saint-Laurent, as well as in Saint-Bruno, on the south shore of Montreal. In a statement Monday, the Confederation des syndicats nationaux (CSN) argued it is up to the Quebec government to preserve jobs at its local facilities.

"It is unfortunate to witness the deconstruction of a Quebec company, built by thousands of workers here," said CSN president Jacques Letourneau. "The important thing today is that the government has to use its power to maintain jobs at La Pocatiere...the government has all the right cards in hand to ensure the development of the railway construction sector in Quebec." The trade union federation is also urging Quebec Premier Francois Legault to speed up the process of several local public transit projects, including Montreal's Reseau express metropolitain[5] (REM). Bombardier shares have fallen 70 per cent since July 2018, while Alstom's have risen by more than 50 per cent over the past two years, including four per cent after markets opened Monday.

Closing on the deal is expected in the first half of 2021.

-- with files from The Canadian Press.

More on this story from[6]


  1. ^ Q400 turboprop aircraft (
  2. ^ CRJ regional jets (
  3. ^ the former C-Series (
  4. ^ studying options to accelerate its deleveraging (
  5. ^ Montreal's Reseau express metropolitain (
  6. ^ (

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