ALSTOM SA

Key milestone on Alstom’s acquisition project of Bombardier Transportation: signed sale and purchase agreement1 under revised price terms

 

Key milestone on Alstom’s acquisition project of Bombardier Transportation: signed sale and purchase agreement¹ under revised price terms

• Net proceeds expected now up to €5.3 bn against a range of €5.8 - €6.2 bn previously agreed
• Closing now expected in Q1 2021

16 September 2020 – Alstom announced today that it signed the sale and purchase agreement¹ with Bombardier Inc and Caisse de dépot et placement du Québec (CDPQ) for the acquisition of Bombardier Transportation.  

“The acquisition of Bombardier Transportation represents a transformational change for Alstom. It will enable the Group to accelerate on its strategic roadmap and strengthen its leadership in the context of a dynamic market, at a time where sustainable transportation is at the heart of the global agenda.
Bombardier Transportation will bring to Alstom complementary geographical presence to broaden Alstom’s commercial reach in key growing markets, strong product complementarities in rolling stock, strategic scale in services and signalling, industrial capacity in key countries, a leading portfolio offering and additional R&D capabilities to invest in green and smart innovation. Alstom will also welcome new talent and expertise, with the arrival of Bombardier Transportation employees.”, said Henri Poupart-Lafarge Chairman and CEO of Alstom.

Terms of the agreement have been adapted to the current situation. A €300m reduction in the price range has been agreed with Bombardier Inc and CDPQ. Excluding any further downward adjustments linked to the net cash protection mechanism², the price range for the acquisition of 100% of Bombardier Transportation shares will be therefore €5.5bn to €5.9bn³.

Alstom considers that the proceeds are likely to amount up to €5.3 bn, based on estimated potential post-closing adjustment and obligations linked to the net cash protection mechanism², compared to the €5.8bn – €6.2bn range communicated on February 17^th, 2020.⁴

The financing structure remains the same as communicated previously, in particular the size and terms of the rights issue and the reserved capital increases of CDPQ and Bombardier Inc. As announced last February, pursuant to the new terms of the acquisition, CDPQ will become the largest shareholder of Alstom with approximately 18% of the share capital and voting rights.

Alstom is convinced of the strong strategic rationale for the acquisition and is confident in its ability to recover Bombardier Transportation’s commercial, operational and profitability potential. Alstom confirms its objectives to deliver €400m run rate cost synergies in year 4 to 5 and to restore Bombardier Transportation margin towards standard level in the medium term. The transaction is expected to be double digit EPS accretive in year 2 post closing⁵ and to preserve Alstom’s strong credit profile with a Baa2 rating.