Alstom reaches deal to buy Bombardier’s train unit: Report
Alstom SA has reached a preliminary deal to buy Bombardier Inc’s train business for more than $7 billion, the Wall Street Journal reported on Sunday, citing people familiar with the matter.
Quebec pension giant Caisse de dépôt et placement, which owns a 32.5% stake in Bombardier’s train unit, has agreed to sell its stake to Alstom and buy a minority stake in the combined train company, the report added
The discussions, first reported by Bloomberg News on Jan. 21, began before Bombardier surprised the market last month by warning of disappointing fourth-quarter sales.
If terms are completed, the deal could be announced as early as Monday, according to the Journal report. Alstom is expected to buy the unit using mainly cash and some stock component. Quebec pension firm Caisse de Depot et Placement, which owns 32.5% of Bombardier’s train unit, has agreed to sell its stake to Alstom and acquire a minority holding in the combined train company, the report added.
Alstom going ahead with a deal could allow the French company to avoid paying a material premium due to Bombardier Transportation’s cash needs and recent project delays, according to a Bloomberg Intelligence report last week.
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