Alstom signs MoU for the acquisition of Bombardier Transportation

Copyright: Bombardier Transportation

Alstom, Bombardier Inc. and Caisse de dépôt et placement du Québec (CDPQ) have announced the signing of a Memorandum of Understanding (MoU) for Alstom’s acquisition of Bombardier Transportation. Following the transaction, Alstom will have a backlog of approximately €75 billion and revenues of approximately €15.5 billion.

Chairman and CEO of Alstom, Henri Poupart-Lafarge, said: “I’m very proud to announce the acquisition of Bombardier Transportation, which is a unique opportunity to strengthen our global position on the booming mobility market. This acquisition will improve our global reach and our ability to respond to the ever-increasing need for sustainable mobility.”

Similarly, Danny Di Perna, President of Bombardier Transportation, said: “We welcome this announcement. We see great geographic and product complementarity with potential to translate into increase capacity to respond to the growing global demand for rail. With a shared commitment to the next generation of green and digital rail solutions, a combined company would benefit from economies of scale resulting into improved investment and innovation capabilities, and a streamlined investment pipeline.”

For the acquisition of 100 per cent of Bombardier Transportation, Alstom will pay between €5.8 billion to €6.2 billion via a mix of cash and new Alstom shares. CDPQ will reinvest approximately €2 billion – corresponding to 100 per cent of cash proceeds to be received from the sale of its stake in Bombardier Transportation – and further invest €0.7 billion in Alstom.

Poupart-Lafarge continued: “Bombardier Transportation will bring to Alstom complementary geographical presence and industrial footprint in growing markets, as well as additional technological platforms. It will significantly increase our innovation capabilities to lead smart and green innovation.”

As a result of the transaction, Alstom will benefit from:

• Significant additional technologies and added R&D resources to consolidate its innovation leadership in sustainable mobility
• Complementary geographical presence to broaden Alstom’s commercial reach in key growing markets leveraging on Bombardier’s successful historical track record in Germany, UK, North America and its unique presence in China
• Attractive rolling stock additions to Alstom’s portfolio establishing a comprehensive offering across all rail segments to better address customers’ needs for fit-for-purpose mobility solutions
• Significant assets for Alstom services business with access to the largest installed train fleet worldwide and a wide maintenance facilities network in a high value segment
• Complementary and strategic new geographies in signalling enabling Alstom to accelerate the roll-out of its solutions
• Best cost industrial footprint including in Eastern Europe, Mexico and China and complementary footprint in mature markets such as Germany and the UK.

“We will be thrilled to welcome all the talent and energy of Bombardier Transportation employees. We are deeply committed to step up the turnaround of Bombardier Transportation activities and deliver significant value to all stakeholders, particularly our customers. We will also further develop Bombardier Transportation’s historical presence in Québec, drawing on Québec’s well-established strengths in innovation and sustainable mobility. We are pleased to welcome CDPQ as a new long-term shareholder. CDPQ is fully supportive of the transaction and Alstom’s strategy,” concluded Poupart-Lafarge.

The transaction will also be subject to clearance from relevant regulatory authorities and anti-trust authorities. Closing is expected in the first half of 2021.