Daily Management Review

Alstom And Bombardier In ‘Advanced Talks’ For Rail Deal


The said deal can value “up to 6.2 billion euros”, equivalent to “$6.95 billion”.

The C.E.O of Bombardier revealed that the company was in “well-advanced” discussions with the French giant, Alstom for selling its rail division as it is pursuing “regulatory approval” for the same. The deadline for clearance regarding the decision of approval to the “French TGV high-speed train maker bid for Bombardier Transportation” was set by July 16, 2020 by the EU “antitrust regulators”, as per the “European Commission website”.
In the words of the Chief Executive Officer of Bombardier, Eric Martel:
“The discussions are going on between Alstom and us with the commission and there (are) remedies that have been discussed already. Those discussions are very open. They are well advanced also. We’re quite comfortable with the plan we’ve proposed.”
Even though, Martel noted that the commission will carry out its “own analysis” before arriving at any decision, while he added:
“but I think that the discussions so far are extremely productive.”
The said deal can value “up to 6.2 billion euros”, equivalent to “$6.95 billion”. The rail deal, however, is now dependent on “regulatory approval” while it is expected to close the deal by the “first half of 2021”.
Following the completion of the said deal, Bombardier has plans of becoming a pure jet manufacturer, although it is to fight its way through “high debt” and the “weaker industry demand for business jets” as an effect of coronavirus pandemic. Moreover, the company witnessed a “74% year-to-date” drop in its share last week. As result, Bombardier’s name disappeared from the “blue-chip stock index” of Canada. While, earlier in a virtual annual meeting, Martel was quoted in his address to the stakeholders:
“We understand that our performance has shaken the confidence of many stakeholders”.
Furthermore, Martel also informed that the company will be working on a “strategic business plan” through the fall to “examine strategies” such as “new markets for business aircraft”. Just like rival companies Textron and General Dynamics Corp, Martel sees “incorporating a defence business” as a strategic “option”.