Alstom completes acquisition of Bombardier Transportation's Rail Business

Alstom become new global leader in smart and sustainable mobility
Maria Rose Posted on: 2021-01-29 18:49:00 Viewer: 4,313 Comments: 0 Country: France City:

Alstom completes acquisition of Bombardier Transportation's Rail Business

Saint Ouen, France (Urban Transport News): Alstom announces today the completion of the acquisition of Bombardier Transportation. Leveraging on its clear Alstom in Motion strategy and its strong operational fundamentals and financial trajectory, Alstom, integrating Bombardier Transportation, will strengthen its leadership in the growing sustainable mobility market by reaching a critical size in all geographies and integrating further solutions and assets to better serve its customers worldwide.

The enlarged Group has combined proforma revenue of around €15.7 billion and a €71.1 billion combined backlog. It employs 75,000 people worldwide in 70 countries, has unparalleled R&D capabilities and a complete portfolio of products and solutions.

Henri Poupart-Lafarge, Chairman and CEO of Alstom, said:

Today is a unique moment for Alstom and the mobility sector worldwide, with the creation of a new global leader centered on smart and sustainable mobility. More than ever, the world has to engage in a deep environmental and social transition to be able to address the great challenges of urbanization, equal opportunity to economic development and climate change. Transportation, essential to the working and social life but with great environmental impact is at the heart of this transition.

"Our responsibility, together with the 75,000 people of Alstom today, is to transform our unique set of assets created by this transaction into the enabler of this necessary transformation. Our responsibility is to bring the innovation required for such extreme challenges and that all communities throughout the world, as they are traveling to meet loved ones or to work, can have access to the same quality of service and efficiency while caring for our planet,” he added.

Shareholding and governance

CDPQ (Caisse de dépôt et placement du Québec) today becomes Alstom’s main shareholder with 17.5% of Alstom’s share capital. CDPQ is committed to a long-term shareholder approach with a strong track record of investing in infrastructure and transport assets.

Bouygues now holds approximately 6% of Alstom’s share capital.

In accordance with the resolutions approved by the Alstom’s Shareholders’ Meeting held on October 29, 2020, Ms Kim Thomassin, representing CDPQ, and Serge Godin joined today Alstom’s Board of Directors. Benoit Raillard has been appointed by Alstom’s Board of Directors as an observer (censeur) upon CDPQ’s proposal.

Price and Financing

The reference price was established at €5.5 billion, at the bottom of the range of €5.5 billion to €5.9 billion communicated on September 16th, 2020. The proceeds for the acquisition were established at €4.4 billion, which include the impact of the minimum cash adjustment mechanism based on a negative net cash position of Bombardier Transportation as of December 31st, 2020 and other further contractual adjustments for an amount of €1.1 billion.

The acquisition was financed through the rights issue of around €2 billion completed on December 7, 2020, and part of the senior bond issuance of €750 million completed on January 11, 2021, and by the reserved capital increases to the benefit of affiliates of CDPQ and Bombardier Inc., in total amounts, respectively, of €2.6 billion and €500 million completed today as part of the closing of the transaction.

Next steps

Alstom will pursue and finalize sales of certain assets of the combined Group in line with the commitments described in the European Commission’s press release on July 31st, 2020. The divestitures will comply with all applicable social processes and consultations with employee representatives’ bodies.

The rail market is supported by fundamental growth drivers, such as accelerated urbanization, public investment strategies, and the worldwide push for the green and digital transformation of transport systems. Despite the pandemic, recent stimulus announcements clearly confirm the development of sustainable mobility and more specifically of rail as a long-term priority. The rail manufacturing market is expected to grow at a 2.3% CAGR by 2025.

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