French company Alstom SA on Monday said it had agreed to buy the rail division of Bombardier Inc, speeding up the Canadian firm’s fire sale.
Alstom is to pay up to 6.2 billion euros (US$6.7 billion) in a mix of cash and shares, according to a memorandum of understanding between the firms.
The Quebec pension firm Caisse de Depot, which owns 32.5 percent of Bombardier Transportation, would become Alstom’s biggest single shareholder on completion with about 18 percent of the French company.
Alstom said it planned to move its Americas headquarters to Montreal.
“This acquisition will improve our global reach and our ability to respond to the ever-increasing need for sustainable mobility,” chief executive Henri Poupart-Lafarge said.
“There is no idea of restructuring or threats to jobs, but rather the opposite,” he later told journalists.
The acquisition stood to boost Alstom’s presence in markets where Bombardier is strong — notably Germany, Britain, North America — and also in China, where the Canadian company’s position is “unique,” he said.
Alstom’s move comes a year after the European Commission blocked an attempt at a mega-merger of its rail activities with those of Germany’s Siemens AG.
Berlin, Germany-based Bombardier Transport last year posted sales of US$8.3 billion, ending the year with US$35.8 billion of business on its order books.
Alstom’s sales for 2018 and last year came in at US$8.1 billion and the firm had outstanding orders of US$43 billion at the end of 2018.
The company, which makes France’s TGV high-speed trains, employs 36,300 staff, a quarter of them in France.
Adding Bombardier Transport would position Alstom as a global rival to China’s CRRC Corp (中國中車), which boasted sales of about US$30 billion in 2018.
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