On 27 July Wabtec Corporation announced plans to acquire French rail vehicle equipment supplier Faiveley Transport in a deal which would ‘create one of the world’s largest public rail equipment companies’, with revenues of EUR4.1bn.
Shareholders owning 51% of Faiveley Transport have entered into exclusive discussions around Wabtec’s offer of EUR100/share, payable 25% in cash and 75% in Wabtec preferred stock to be converted into common shares after three years. If successful, Wabtec – formed through the merger of the Westinghouse Air Brake Company and MotivePower Industries Corporation in 1999 and headquartered in the Pittsburgh suburb of Wilmerding – would then make a tender offer for the remaining public shares at EUR100m/share or an equivalent in Wabtec preferred stock.
Faiveley Transport’s Paris headquarters at Gennevilliers would become Wabtec’s global transit headquarters under the Faiveley Transport name.
It is reported that Wabtec plans to fund the EUR1.64bn purchase – including assumed debt – from existing cash reserves, credit facilities and other debt financing if required.
Faiveley currently has 5700 employees in 24 countries, while Wabtec has 13 000 employees in more than 20 countries in the locomotive and rolling stock components, shunting and commuter rail locomotives and aftermarket services sectors.