Alstom to double in size with confirmed Bombardier take-over
On Monday evening, French rail equipment giant, Alstom, has confirmed putting a deal on the rails to take over its Canadian branch peer’s rail division, Bombardier Transportation, probably by the beginning of next year.
After weeks of discussion behind closed doors and rumors getting louder last week, the two companies and major shareholder pension fund, Caisse de dépot du Québec (CDPQ), reached an agreement.
With the acquisition of Bombardier Transportation for an estimated price of €5,8 to €6,2 billion, Alstom is doubling its size to a €15,5 billion turnover, 75 650 employees worldwide, and a well-filled order book of €75 billion.
Bigger than Siemens merger
This will make the French train builder even more significant than in the event of an alliance with Siemens, a deal the EU Commission put a stop to in February 2019. That merger into ‘an Airbus of rail equipment’ was intended to be armed better for competing with Chinese giant CRRC. But with a turnover of €28 billion and 186 000 employees, the latter remains a plus-size.
But before the new ‘European-Canadian train giant’ can take off, it will need the authorization of several competition authorities in the world, with the ‘iron lady’, EU’s Margrethe Vestager, responsible for the competition, again on its path.
Although Bombardier Transportation is a ‘modest player in Europe’, according to Alstom’s CEO Henri Poupart-Lafarge, the beefed-up company would have a quasi-monopoly in France at least in rolling train equipment.
Experts from KBC Asset Management estimate Alstom-Bombardier would have 50% of the European market in high-speed trains, 30% of regional trains, and 30% of metro trains. Canadian CDPQ that will be the major shareholder of the new Alstom-Bombardier construction with 18%, is willing to invest two billion euros. The latter already has a 30% stake in the Eurostar high-speed trains.
No word about Belgium
Both Alstom and Bombardier Transportation have factories in Belgium. But no word about Belgium in the press release, so far. Alstom employs some 1 050 people in two branches in Charleroi, specialized in ETCS railway signaling systems and traction systems for rolling material.
Bombardier has a factory in Bruges, employing some 300 people who are merely specialized in building trains and trams. At the moment, Bombardier Bruges has its hands full with finishing M7 double-deck carriages for Belgian railway company, NMBS/SNCB, as a subcontractor for Alstom. For the Belgian Desiro-trains, Bombardier is working together with Siemens.