Alstom acquires Bombardier Transportation and becomes No. 2 in rail transport

  •   01/02/2021 - 08h36
  •   DEHOUI Lionel

The French company Alstom has just leapt up the rankings among the giants of the railway sector. Indeed, the group has become number 2 worldwide in this sector. This follows the acquisition of the Canadian group Bombardier Transport. Thanks to this takeover, the French railway manufacturer is further strengthening its activities to consolidate its presence in several countries around the world.

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Alstom acquires Bombardier Transportation and becomes No. 2 in rail transport
Image copyright: Mike Mozart - Flickr

Acquisition of the entire Bombardier Group by Alstom

Alstom Rail Group already has a strong reputation in its sector of activity and is looking forward to increasing the size of its business through new partnerships and acquisitions. It is with this in mind that the company has recently approached its competitor Bombardier Transport with a view to a takeover.

Announced in February 2020, this objective of the French group has just been achieved. Indeed, this Friday, January 29, 2021, Alstom finalized the acquisition of the Canadian group. As part of the transaction, the company will pay a total of €5.5 billion. Thanks to this takeover, the French railway manufacturer will have the entire share capital of its competitor.

In fact, Alstom will actually pay €4.4 billion to the Canadian group to take over its railway activities. In addition to this amount, €1.1 billion will be paid to cover negative cash flow and other contractual adjustments. Furthermore, the final cost of the transaction is much less than the €5.8 to €6.2 billion originally proposed. However, it remains within the range of EUR 5.5 to 5.9 billion, which was revalued in September.

 

Alstom improves its positioning in the sector

The acquisition of Bombardier Transport will enable Alstom to complete its product range and geographical presence, with a very strong position in France. The acquisition will also enable the French group to improve its position in the ranking of companies operating in the rail sector.

Alstom now occupies second place in this ranking. It becomes number 2 worldwide with a combined turnover of €15.7 billion. The company has 75 000 employees in 70 countries, including 17 500 engineers. At the top of this ranking is the Chinese group CRRC with approximately 29 billion euros (in 2019).

The Siemens Mobility Group completes the podium in third place. As a reminder, the French manufacturer had in the meantime drawn up a merger project with the German company. Unfortunately, this project was vetoed by the European Commission in February 2019.

 

Alstom strengthens its presence in countries around the world

In a press release, Henri Poupart-Lafarge, Alstom's CEO, welcomed the creation of a new global leader based on sustainable and intelligent mobility. The company reports an order book of €71.1 billion. In addition, the acquisition of Bombardier will enable the French rail manufacturer to strengthen its presence in the countries of the world where it operates.

Until now, the two groups have been roughly comparable in size in terms of the scope of their activities worldwide. Indeed, Alstom has a strong presence particularly in France, Italy, Spain, India, South-East Asia, North Africa and Brazil.

For its part, Bombardier Transportation is a fairly decentralised structure with its headquarters in Berlin. The company has a presence in the United Kingdom, Germany, China, North America and the Nordic countries. In addition, the French group Alstom expresses its satisfaction at the fact that, in its new configuration, it has an unparalleled commercial reach in all geographies.