The deal is possible subject to a number of obligations assumed by Alstom
Thierry Monasse / AP / TASS
The European Commission (EC) has allowed the French engineering concern Alstom to acquire the Canadian rolling stock manufacturer Bombardier Transportation. This was announced in a press release from the EC, published on July 31.
EC Executive Vice President Margrethe Vestager, responsible for competition policy, noted that Alstom and Bombardier are the leading suppliers of modern trains used by millions of passengers every day across the European Union. “Thanks to the comprehensive tools proposed to tackle competition challenges in high-speed trains, mainline trains and mainline signaling, the commission was able to quickly review and approve the deal. In the future, there will be a stronger combined structure of Alstom and Bombardier. At the same time, thanks to these funds, the new company will continue to compete in its main markets for the benefit of European clients and consumers, ”she concluded.
To meet the challenges of the European Commission, Alstom has proposed a number of commitments. Sale of Bombardier assets currently being used to build the Zefiro high-speed platform in conjunction with Japanese conglomerate Hitachi (including measures to keep the Bombardier-Hitachi joint proposal for the British HS2 high-speed line under construction). Sale of the main platforms of the Alstom Coradia Polyvalent and Bombardier Talent 3 mainline trains, as well as the Alstom production sites in the French commune of Reichshoffan and Bombardier in the German city of Hennigsdorf. Supply legacy on-board safety control devices to operators and provide the necessary support for device interactions for the benefit of operators and competitors in the signaling industry.
“The final commitments are aimed at addressing the competition issues identified by the panel in connection with Alstom’s acquisition of Bombardier, and have been significantly improved following feedback from market participants. In this regard, the commission came to the conclusion that the proposed transaction, modified in accordance with the obligations, will not cause any problems in the field of competition, ”the EC concluded.
As a reminder, in February, Alstom, Bombardier and the Quebec Pension Fund CDPQ signeda memorandum of understanding providing for the sale of 100% of the rolling stock manufacturer Bombardier Transportation. According to Bombardier, the company was valued at 7.45 billion euros. Alstom announced that they would acquire the company at a price of 5.8 to 6.2 billion euros, and the CDPQ pension fund will reinvest in Alstom 2 billion euros raised from the sale of a stake in Bombardier Transportation, and will additionally invest 0.7 in shares of the French concern billion euros. According to the CDPQ, the total investment of the fund will be between 2.63 and 2.78 billion euros, depending on the conditions for closing the deal. CDPQ will purchase Alstom shares at 44.45 euros per share. The transaction is expected to close in the first half of 2021.
As a result of the transaction, Alstom’s order book will reach about 75 billion euros with revenues of 15.5 billion euros. The company notes that Alstom will receive significant additional capacity, technology and resources for research and development. Bombardier announced a strategic decision to focus on business aviation and its intention to reduce borrowing by selling a subsidiary. CDPQ also noted the importance of strengthening Alstom’s presence in Quebec, where the group’s headquarters in the Americas will be located, managing 13,000 employees.
In February last year, the European Commission banned merger of German and French engineering concerns Siemens and Alstom due to the loss of competition in the market from the creation of a dominant supplier. The decision was made following a study of the deal’s consequences that lasted more than a year.(Gudok.ru)