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Alstom Agrees To Sell French Factory To Secure EU Regulatory For Bombardier Purchase


07/10/2020


Alstom Agrees To Sell French Factory To Secure EU Regulatory For Bombardier Purchase
A French rail factory has been agreed to be sold by France’s TGV high-speed train maker Alstom in addition to making other concessions so that it can get regulatory approval of the planned acquisition of the transportation business of Canada’s Bombardier Inc.
 
The other commitment made by the French firm also includes selling off of Alstom’s regional train unit Coradia Polyvalent and divesting a Bombardier commuter trains division along with the production facilities at its Hennigsdorf site in Germany that are related to the business unit.
 
Currently the EU antitrust authorities are scrutinizing the proposed acquisition bid of Montreal-based Bombardier’s rail business by Alstom, which was placed in February and is worth up to 6.2 billion euros ($7 billion). It is expected that the deal could only be passed by the antitrust authorities if the French company agrees to divest parts of its business.
 
According to reports quoting sources familiar with the matter, the offer of Alstom is more than what it thinks is necessary in a bid to get the deal done.
 
Alstom’s attempt to merge rail assets with Siemens AG was blocked by EU regulators last year.
 
The second largest train manufacturer in the world would be created by the purchase of Bombardier’s train division by Alstom, which is aiming to rival the market leader in the segment – China’s CRRC Corp.
 
There were reports a day ago that Alstom would be selling off its Reichshoffen regional train factory in eastern France which has a total of about 800 employees.
 
While opposing the disposal of eh fund, France’s Force Ouvriere (FO) union also called on Alstom and Bombardier to at retain the jobs at the factory that are expected to be afraid by the concessions plan of the French firm.
 
In an interview with WirtschaftsWoche magazine, the IG Metall union backed the principle of a merger in Germany where Bombardier has big operations. The union however called for ensuring job guarantees.
 
Following its preliminary review of the deal, it is expected that the  EU is due to decide whether or not to pursue a deeper enquiry on July 16.
 
Providing access to some products within Bombardier’s train control systems and signalling units were among the other concessions that that Alstom has agreed to make to get the deal through the regulators.
 
The concessions plan was supported by Bombardier, the company said in a spate statement, and added that the deal was on track to close in the first half of 2021.
 
(Source:www.reuters.com)