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Tuesday, March 31, 2020

Alstom to buy Bombardier Transportation?

Alstom has announced that it has signed a Memorandum of Understanding with Bombardier Inc. and its shareholder Caisse de dépôt et placement du Québec (CDPQ) with the view of acquiring Bombardier Transportation for around €6 billion.

Announcing the agreement, Henri Poupart-Lafarge, chairman and CEO of Alstom, spoke as though the takeover was already a done deal. “I’m very proud to announce the acquisition of Bombardier Transportation, which is a unique opportunity to strengthen our global position on the booming mobility market,” he said. “Bombardier Transportation will bring to Alstom complementary geographical presence and industrial footprint in growing markets, as well as additional technological platforms.”

However, an agreement to combine Alstom with Siemens Mobility in 2018 was later derailed by the European Commission due to competition concerns and the possibility that the merger would have resulted “in higher prices for the signalling systems that keep passengers safe and for the next generations of very-high-speed trains”. The new deal will have to go before those same competition policy commissioners, although, as it is a takeover by Alstom rather than a merger, the situation is slightly different.

The combined Alstom/Bombardier operation will have an orderbook of some €75 billion, which will give it a strong global position. The next step is now down to the market competition authorities.

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