On 16 September, following conditional approval by the European Commission on 31 July (TAUT 993), Alstom signed the purchase agreement to buy Bombardier Transportation (BT).
The price was reduced from that originally announced (EUR6bn, TAUT 988) due to the recent announcement by Bombardier of poor results for its Transportation subsidiary. Alstom is now expected to pay up to EUR5.3bn for 100% of the BT shares, excluding any additional downward adjustments linked to the net cash protection mechanism.
Major BT shareholder Caisse de dépôt et placement du Québec (CDPQ) will convert its 30.5% stake, acquired in November 2015, to Alstom shares. With an additional investment of EUR700m, CDPQ is to become Alstom’s largest shareholder with 18% of the share capital and voting rights.
In its financial report for the second quarter of 2020, Bombardier said that revenues of USD1.5bn were a reflection of the reduced production at key sites, as well as revised estimates on several projects approaching completion in Germany and the UK. Its adjusted EBIT loss of USD383m was significantly above expectations; however, there was an order backlog of USD33.7bn and new orders totalling USD1.6bn.
Henri Poupart-Lafarge, Alstom Chairman and CEO, said: “Bombardier Transportation will bring to Alstom complementary geographical presence to broaden Alstom’s commercial reach in key growing markets.”
Completion of the transaction is now expected in the first quarter of 2021. Alstom has said it aims to deliver cost savings of EUR400m and restore BT’s margins in years four to five of the acquisition.