Alstom and Bombardier among India’s leading suppliers
The Competition Commission of India (CCI) has approved the acquisition of sole control over Bombardier Transportation’s (Bombardier Transport) by Alstom, which has extensive manufacturing based in India.
The acquisition of approximately 18% and 3% share capital of Alstom S.A. by Caisse de dépôt et placement du Québec (CDPQ) and Bombardier Inc, respectively, under Section 31(1) of the Competition Act, 2002.
In India, Alstom manufactures and supplies, inter alia, signalling solutions, rail electrification, rolling stock (locomotives and metros), track works, maintenance services and it also provides associated construction and engineering services through its subsidiaries, including Alstom Manufacturing India Private Limited, Alstom Systems India Private Limited, Alstom Transport India Limited, and Madhepura Electric Locomotive Private Limited
Bombardier is a Canadian corporation globally active in the business aircraft and the rail transport industries.
Bombardier Transportation is the global rail solutions division of Bombardier. It offers a wide range of rail solutions.
In India, Bombardier Transportation is engaged in the sale of rail vehicles, propulsion, control equipment and signalling solutions through its subsidiary Bombardier Transportation India Private Limited.
CDPQ is a global long-term institutional investor. It manages funds primarily for public and para-public pension and insurance plans. It invests in major financial markets, private equity, fixed income, infrastructure and real estate.
The CCI gave its approval on 19 Sept 2020.
On 17 February 2020, Alstom announced has a Memorandum of Understanding with Bombardier Inc and CDPQ in view of the acquisition of Bombardier Transportation. Post-transaction, Alstom will have a backlog of around Euro75 billion and revenues around Euro15.5 billion
The price for the acquisition of 100% of Bombardier Transportation shares will be Euro5.8 billion to Euro6.2 billion which will be paid via a mix of cash and new Alstom shares.
CDPQ will reinvest Euro2 billion corresponding to 100% of cash proceeds to be received from the sale of its stake in Bombardier Transportation and further invest Euro0.7 billion in Alstom, outlining its strong belief in the strategic rationale and value creation potential of the combination.
Alstom and Bombardier operate in a very positive market environment with passenger traffic expected to grow between 3% to 5% annually over the 2015-2025 period and the global rail OEM market expected to achieve a +3.0% CAGR between 2021-2023.
The dynamic is driven by the urbanisation trend and a strong push for decarbonisation of mobility. In Europe, the European Commission has set very ambitious targets in terms of CO2 reduction and several countries have announced large investments in rail.
Alstom is a preeminent rail equipment player with an industry-record backlog of Euro40 billion and Euro8.1 billion of annual sales as of 31-Mar-2019. Over the period 2016-2019, Alstom delivered strong sales development with an average annual growth of 5.5% outperforming the market, and significantly improved profitability (up to 7.5% adjusted EBIT margin).
Bombardier Transportation is a reference player in global rail transportation with a Euro32 billion backlog and Euro7.4 billion sales as of December 2019. With a track record of market leadership and strong expertise, Bombardier Transportation offers a broad product portfolio across all market segments and has a well-balanced industrial footprint between best-cost and high-tech countries.
Post-transaction, Alstom will benefit from significant additional technologies and added R&D resources to consolidate its innovation leadership in sustainable mobility.
The group will also further develop its presence in Québec, Canada. After the transaction, Montréal will welcome the Headquarters of Alstom of the Americas, leading all Alstom operations and expansion in these geographies. In addition, drawing on Québec’s well-established strengths in innovation and sustainable mobility, Alstom will establish a centre of excellence for design and engineering, as well as high-tech R&D activities, which will notably be focused on developing sustainable mobility solutions.
A unique opportunity to accelerate Alstom’s strategic roadmap, Alstom in Motion
The acquisition of Bombardier Transportation is a one-time opportunity coming at the right moment for Alstom, having significantly strengthened its operational and financial profile over the past 4 years to accelerate its strategic roadmap, and adding to Alstom complementary commercial and industrial platforms. #technologies #infrastructure #suppliers #manufacturers #rail /fiinews.com
