MONTREAL – Bombardier Inc. says it has reached a US$8.2-billion deal to sell its rail business to French train giant Alstom SA.
The agreement narrows Bombardier’s focus as the plane-and-train maker commits itself solely to business jets while casting off its largest division in part to help pay down US$9.3 billion in debt.
Bombardier says the transaction will see Quebec pension giant Caisse de depot et placement, which owns a 32.5 per cent stake in Bombardier’s train division, become Alstom’s largest shareholder.
Bombardier says net proceeds from the deal will be between US$4.2 billion and US$4.5 billion after deducting the Caisse’s equity position of roughly US$2.2 billion, as well as adjustments for debts and other liabilities.
The deal is expected to close in the first half of 2021 if it can move through regulatory hurdles.
Alstom’s purchase is expected to come under intense scrutiny from antitrust regulators in the European Union. Last year, EU authorities blocked a proposed merger between Alstom and the train division of German industrial conglomerate Siemens AG, arguing the proposed tie-up would result in higher price tags on signalling systems and bullet trains.
The acquisition also signals an effort by Alstom to scale up amid rising competition from China’s state-owned CRRC, the world’s largest train maker.
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