Alstom completes $6.7bn deal to buy Bombardier

Alstom completes $6.7bn deal to buy Bombardier

French train-maker Alstom has completed a multi-billion dollar deal to buy the rail business of Bombardier, which has a major site in Derby.

Alstom said the price for the deal to buy Bombardier Transportation, which includes its train-making site in Litchurch Lane, was $6.7 billion (£5 billion).

The acquisition should make Alstom the world’s second largest train-maker, behind China’s CRRC.

The Derby site, which employs around 2,000 people, is currently producing trains for a number of UK operators and recently received a £1.7 billion boost from the Government to export trains to Egypt.

The completion of the takeover comes almost a year after Alstom and Bombardier agreed a memorandum of understanding. The deal was signed off by the European Commission in July.

Henri Poupart-Lafarge, chairman and chief executive of Alstom, said: “This is a unique moment for Alstom and the mobility sector worldwide, with the creation of a new global leader centred on smart and sustainable mobility.”

The enlarged Alstom business will employ 75,000 people worldwide, with revenues of around 15.7 billion euros and order books of 71.1 billion euros.

The firm said the Bombardier deal will give it “unparalleled commercial reach in all geographies” thanks to the “complementarities of the two companies”.

Alstom already has an established customer-base in France, Italy, Spain, India, South-east Asia, Northern Africa and Brazil.

But the Bombardier deal now brings it closer to markets in the UK, Germany, the Nordics, China, and North America. 

Alstom said that staff at Bombardier Transportation, including its Derby workers, have now joined the Alstom Group.

In a statement, it said: “These new talents will enrich Alstom’s operational profile at all levels and build, with Alstom’s employees, one agile, inclusive and responsible Alstom team.”

Alstom added that integrating Bombardier Transportation into its business would give it the “most complete rail portfolio” and “unparalleled R&D capabilities”.

Mr Poupart-Lafarge said: “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.”

Bombardier Transportation’s parent company, Bombardier Inc, has netted $3.6 billion from the deal.

Going forward, it now intends to focus solely on making business jets.

Eric Martel, president and chief executive of Bombardier Inc, said: “With this transaction now complete, Bombardier begins an exciting new chapter focused exclusively on designing, building and servicing the world’s best business jets.

“With an unmatched product portfolio, a world-class customer services network and incredibly talented employees, we have a strong foundation to build upon as we use the proceeds from the transaction to begin addressing our balance sheet challenges through debt paydown.”

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