Alstom to Buy Bombardier Company

buys alstom bombardier
buys alstom bombardier

In 2017, the French company Alstom had failed to merge with the German industrial giant Siemens AG. However, the European Commission prevented this merger proposed in 2019. Today, according to the news from the company Alstom, the French train giant Alstom SA is Bombardier Inc. made a preliminary agreement for the rail company for $ 7 billion of purchase. Paris-based Alstom will make this purchase with cash and share transfer.

The planned deal is Alstom's latest effort to join forces with a competitor to scale with increasing competition prospects from CRRC, China's largest railway supplier.

There will be an official announcement this week if the deal is reached

Quebec pension giant Caisse de dépôt et placement, which owns a 32,5% stake in the train manufacturing section of Bombardier. Caisse agreed to sell its share of dépôt et placement to Alstom and buy its minority stake.

Bombardier suffers from production problems and order delays in the core train unit. Bombardier, whose business has contracted significantly, is already under a debt burden of more than $ 1,5 billion for the next year due to increased costs in some aviation units. Last year, it agreed to sell various departments, including commercial airline, turboprop and aerostructure units.

A few weeks ago, due to concerns that negotiations to sell the train division to Alstom have decreased, the business jet started negotiations to sell the division to Textron Inc. After completion of the agreement with Alstom, negotiations with Textron are expected to be terminated.

Armin

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