Alstom buys Bombardier Transportation

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MarcVD

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Not really a merger, more a sale of all railway related activities of Bombardier to Alstom. Bombardier is short of cash and has an enoumous debt that this sale would help to reduce.
 

Giugiaro

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They're both selling their remaining share of the CSeries program (Airbus A220) and are also selling their railway division and regional aviation division.

Transportation wise they'll only keep their private jet division.

How is it that such a company went from being such a strong competitor into getting itself dismantled in bits by debt? They don't exactly have a 737 MAX kind of "oops" as far as I'm concerned...
 

LNW-GW Joint

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Alstom itself nearly expired a few years ago, but seems to be in the stronger position now.
I'd say a merger with Bombardier has a better chance of EU approval than the proposed Siemens-Alstom tie-up.
Maybe on this one the UK gets its own vote after Brexit.
I can't see any fundamental reason to oppose a tie-up - there would still be two other major train-building/infrastructure groups here (Hitachi and Siemens).
Whether Derby would fancy having French management is another story, of course. ;)
Alstom and Bombardier already work together on some projects, eg in the USA (Amtrak) and Paris (Metro/RER).
 

duesselmartin

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with other major producers in the world market, I found the commissions arguements a bit over the top.
After all, besides the mentioned there still is Hyundai-Rotem, CRRC, EMD (?) GE(?) , other Russian and Asian competitors. All of them free to enter the European markets, just as CRRC is doing now and Hyundai-Rotem already in the Irish and Ukrainian markets.
 

dutchflyer

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They are just scratching a very few tiny edges, the major markets (FR-DE-ES) are strongly in the hands of those 2 biggies. Only IT had to sell out also due to many failures and high debt on Ansaldo.
I am not an expert at all, but think Ive read that Bombardier, the Canucks, have simply paid far too much for all those little companies they have acquired in the years to gain a strong foothold and then became blessed with infinite computer failures and faults that ate also a lot of money, also as all the small companies had their very own styles and were not that easy to unify-a bit tipical for trainbuilders anyway. Its commonly known that the Chinese are trying to wriggle in by grossly subsidising the exports from their incountry sales.
 

daikilo

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And don't forget CAF and Talgo.

Will be interesting to see whether the Competition authority has any opinions about who Derby shouldn't go to given recent orders. Remember Alstom took over MetCam and closed it.
 

LNW-GW Joint

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It's hard to read what is going on.
The international media tends to look at things from a US/global point of view, and always talks up the threat from CRRC which from a European viewpoint is still marginal.
Undoubtedly Bombardier is in trouble in a corporate sense, but how it could play out in the UK is not at all clear.
Nor is it just about train-building, as all the majors now have big infrastructure interests as well.
Alstom may be small in train building terms in the UK, but it has a big slice of NR's signalling and infrastructure work with JV partners Babcock and Costain.

The Reuters article talks up the value of an Alstom-Bombardier tie-up, but also mentions Hitachi:
It remains in active talks with Alstom, one of its closest rivals in Europe, while also looking at Hitachi as another merger option, the sources said, requesting anonymity as the matter is confidential.
https://www.reuters.com/article/us-...ger-with-alstom-hitachi-sources-idUSKBN1ZN24Z
 

TRAX

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According to several news outlets, Alstom will put forward its bid to buy Bombardier Transportation for 7 billion Euros.
 

crablab

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https://www.reuters.com/article/us-...ardier-rail-business-bid-source-idUSKBN206217

PARIS/MONTREAL (Reuters) - Alstom’s (ALSO.PA) board will meet late on Wednesday to discuss buying Bombardier’s (BBDb.TO) rail unit, sources familiar with the matter said, and a media report said the French train maker had valued the business at just under $7 billion.

French TV station BFM reported on its website that Alstom was set to make a firm offer for Bombardier’s Berlin-based rail division.

Three industry sources familiar with the talks said a deal would involve Alstom acquiring Bombardier’s largest unit in terms of revenue, but cautioned an agreement was not finalized.

Bombardier shares were up almost 8% in afternoon trading.

Alstom and Bombardier declined to comment.

A deal would help Montreal-based Bombardier improve its financial footing. The company, which will report its results on Thursday, faces higher-than-expected-costs in its rail division and $9.7 billion in outstanding debt, according to Refinitiv data.

An acquisition would help Alstom compete more effectively against Chinese giant CRRC Corp and in the U.S. market, a fourth industry source said. (601766.SS)

Desjardins analyst Benoit Poirier said in a note to clients that a $7 billion offer seemed high “considering recent operational challenges” in the rail unit.

A planned tie-up between Alstom and Germany’s Siemens AG (SIEGn.DE) collapsed last year due to European regulatory concerns.

“After the failure of the Alstom-Siemens merger, (a deal) would be a good strategic rebound for Alstom,” said a fourth source who was familiar with the French government’s thinking.

Bombardier’s rail assets are heavy in lower-margin rolling stock which are less attractive for Alstom, the source noted, but the deal would still offer synergies.

Alstom had recently made a non-binding offer valuing the business at $7 billion and a new offer would be binding but worth less, BFM said.

Alstom would offer cash for Bombardier’s 70% stake of its railway business and Alstom shares for the 30% held by Canadian pension fund manager Caisse de dépôt et placement du Québec, the report added.

Poirier of Desjardins said he assumed a value of $2.5 billion net of Caisse’s stake in the division, but excluding “pension liabilities which could be significant.”

Caisse, which acquired the stake for $1.5 billion in 2016, declined comment.

One of the industry sources told Reuters that several options were on the table, including Alstom raising capital and the Caisse becoming one of the French company’s main shareholders with Bouygues (BOUY.PA), a French conglomerate that owns a 15% stake in Alstom.

Bombardier is also weighing a sale of either its business jet or rail division.

The company is leaning toward selling rail because it would resolve the need to buy back the Caisse’s share at a high cost, the second industry source said.

Under their agreement, Bombardier could buy back Caisse’s convertible shares at either the fair market value of its stake, or at a minimum 15% compounded annual return, whichever is higher.

Reuters reported last month that Bombardier had approached Alstom and Japan’s Hitachi to find a merger partner for its rail business.
 

Roger B

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Article about this in today's Times - full story is behind the paywall, but i think you used to be able to see one or two articles per month free - not sure whether that's still the case. https://www.thetimes.co.uk/edition/...-motion-for-bombardier-s-train-unit-qr55pm9b2

Also in today's Times is an article quoting Stephen King, the small business business commissioner, saying Bombardier is exploiting small business by paying late - very poor practice: https://www.thetimes.co.uk/edition/...-motion-for-bombardier-s-train-unit-qr55pm9b2
 

Mikey C

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It will be interesting how this affects future orders such as for HS2, where Bombardier has teamed up with Hitachi
 

Mikey C

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Shouldn't this thread be in the main forum, seeing that it will have a big impact on the UK?
 

TRAX

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The process is now being delayed, but it seems it is well underway. The 7 billion amount is apparently settled, margins aside, but talks between Alstom and Bombardier are ongoing.

As a side note, if the buyout goes ahead, the biggest Alstom shareholder will be Canadian.

Shouldn't this thread be in the main forum, seeing that it will have a big impact on the UK?
Turns out Alstom and Bombardier are two major international companies, so I don’t see why we should centre it on the UK... :rolleyes:
 

LNW-GW Joint

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Except if it happens, there will be intense speculation about the future of Derby works.
There could also be a big impact on the two companies' infrastructure operations.
But there may be bigger impacts in places like France and Germany.
 

fgwrich

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The process is now being delayed, but it seems it is well underway. The 7 billion amount is apparently settled, margins aside, but talks between Alstom and Bombardier are ongoing.

As a side note, if the buyout goes ahead, the biggest Alstom shareholder will be Canadian.



Turns out Alstom and Bombardier are two major international companies, so I don’t see why we should centre it on the UK... :rolleyes:
On a side note, it almost sounds a little like the Volkswagen Group v Porsche takeover which resulted in Volkswagen taking over Porsche with Porsche taking the majority of shares in Volkswagen.

This certainly will be interesting to see what this will bring to the UK Market, with as others have mentioned the HS2 bid, future franchises such as South Eastern, and in a few years time potentially anything further for the London Underground too (depending on how the Siemens stock performs).
 

TRAX

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Except if it happens, there will be intense speculation about the future of Derby works.
There could also be a big impact on the two companies' infrastructure operations.
But there may be bigger impacts in places like France and Germany.
There will be speculation for all countries involved, not just the UK.
Indeed there will be more impact in a few countries, for example Alstom will have a monopoly in France if the EU doesn’t intervene to find a new competitor to Alstom in its home country.

On a side note, it almost sounds a little like the Volkswagen Group v Porsche takeover which resulted in Volkswagen taking over Porsche with Porsche taking the majority of shares in Volkswagen.
Except here Bombardier is disappearing, so they’re not taking shares after being bought out.
 

Mikey C

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The process is now being delayed, but it seems it is well underway. The 7 billion amount is apparently settled, margins aside, but talks between Alstom and Bombardier are ongoing.

As a side note, if the buyout goes ahead, the biggest Alstom shareholder will be Canadian.



Turns out Alstom and Bombardier are two major international companies, so I don’t see why we should centre it on the UK... :rolleyes:
This section of the website is surely about international services though, not industrial mergers which have a direct effect on many UK workers AND the future stock ordered by HS2 and the other franchises.

The thread about the proposed Alstom and Siemens merger was in the UK Railway Discussion section and that had less impact on the UK

I imagine there will be people unaware of this merger because it's buried here.
 

TRAX

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Which didn't prevent Alstom complaining loudly when CAF won the french IC EMU market lately...
Indeed, and rightly so, considering that CAF managed to sell SNCF intercity EMUs for the price of Alstom high-speed trains (28 million euros per CAF train).
 

TRAX

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Indeed. As far as Continental Europe is concerned, Alstom Siemens and Bombardier all have more or less the same market share in rolling stock.
 

LNW-GW Joint

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Indeed. As far as Continental Europe is concerned, Alstom Siemens and Bombardier all have more or less the same market share in rolling stock.
It's usually highly skewed to the local champion though.
Not much Siemens in France or Italy for instance, not much Alstom in Germany.
CAF and Talgo dominate in Spain (sometimes using JVs with the majors), as does Hitachi (ex Ansaldo) in Italy.
There are also joint projects, particularly in the USA.
They also all have technology transfer/licensing projects with China, who now seem pretty much self-sufficient and are building their own designs.
 

TRAX

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There are a lot of Alstom trains in Germany, especially Coradia Continentals and Lints which are getting more and more present on regional lines. Alstom has a good spot in the German market due to the fact that it bought LHB a few years ago.
 

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