Alstom and Bombardier Sign Acquisition MoU

Following the confirmation that Alstom was indeed in talks with Bombardier to acquire Bombardier Transportation, Alstom and Bombardier announced they had signed a Memorandum of Understanding agreeing that Alstom would acquire 100 percent of Bombardier Transportation from Bombardier Inc. and Caisse de Dépôt et Placement du Québec (CDPQ).

The two companies want to complete the transaction in the first half of 2021, depending on regulatory approval. They agreed a price of between 5.8 billion euros (6.3 billion USD) and 6.2 billion euros (6.7 billion USD). This money would come from a mix of cash and new Alstom shares. CDPQ meanwhile would reinvest around 2 billion euros (2.2 billion USD), corresponding to 100 percent of cash proceeds that would come from the sale of its stake in Bombardier Transportation and further invest 0.7 billion euros (0.76 billion USD) in Alstom.

After the transaction Alstom would have a backlog in the region of 72 billion euros (78 billion USD), with 40 billion euros (43 billion USD) coming from Alstom and 32 billion euros (34.7 billion USD) coming from Bombardier Transportation, and revenues of around 15.5 billion euros (16.8 billion USD).

Bombardier says it wants to focus on its aviation business.