Bombardier to sell $8.2bn rail unit to AlstomChristian Fernsby ▼ | February 18, 2020
Bombardier has agreed to sell its rail division to Alstom for $8.2 billion.
Topics: Bombardier rail Alstom
“Going forward, we will focus all our capital, energy and resources on accelerating growth and driving margin expansion in our market leading $7.0 billion business aircraft franchise,” Alain Bellemare, president and chief executive officer of Bombardier said in a press release, citing a stronger balance sheet as a crucial benefit of the deal.
According to Bombardier’s statement, the newly signed memorandum of understanding will see it and Caisse de dépôt et placement du Québec sell their interests in the rail business to Alstom.
In return, Bombardier will receive a much needed cash injection along with $550 million of Alstom shares for a fixed price, which can be monetized after a three month, post closing lock up period.
Caisse, for its part, will reinvest its cash proceeds in Alstom, along with an additional US$760,000, for an 18 per cent stake in the French company.
Caisse will become Alstom’s largest shareholder, and will have two seats on the board.
“Bombardier Transportation will bring to Alstom complementary geographical presence and industrial footprint in growing markets, as well as additional technological platforms,” said Henri Poupart Lafarge, chairman and CEO of Alstom, in a press release. ■