Alstom to increase its capital by €2 billion for the acquisition of Bombardier

  •   16/11/2020 - 14h10
  •   HARMANT Adeline

It was therefore on Monday morning that we learned of this capital increase of EUR 2 billion to partially cover the takeover of Bombardier Transport, which will cost nearly EUR 5.3 billion. It should be recalled that this operation will lead to the creation of the world's number two rail operator and that it should be finalised during the first quarter of 2021.

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Alstom to increase its capital by €2 billion for the acquisition of Bombardier
Image copyright: Mike Mozart - Flickr

A further step towards the acquisition of Bombardier Transportation :

Alstom has thus taken a new step in its acquisition of Bombardier Transport. Indeed, the announcement on Monday of a €2 billion capital increase is a sign that this operation is proceeding on schedule.

The capital increase thus announced was indeed expected by investors since it was provided for in the financing plan for the acquisition of Bombardier Transport by Alstom. Above all, the details of this operation were expected. Following this announcement and since the opening of the Paris trading session, the Alstom share, which opened higher, is now moving in a zigzag pattern and was beginning to stabilise by mid-morning.

It should be recalled here that Alstom's takeover of Bombardier Transport will give rise to the world's second largest rail operator and that the financing of this operation depends in part on this capital increase. Indeed, at the end of October, Alstom's shareholders had given the go-ahead for this takeover operation to the tune of €5.3 billion.

 

Opening of the operation until 30 November:

As regards the details of this capital increase, the opening takes place today with a preferential subscription rights issue of 2 billion euros, including the issue premium. This operation will use three new shares for 10 existing shares at a subscription price of 29.50 euros per new share and a theoretical value of the preferential subscription right of 2.90 euros.

Capital increases reserved for affiliates of the Caisse de dépôt et placement du Québec which is the largest shareholder of Bombardier Transportation with 32.5% of the capital as well as Bombardier Inc. for amounts of 2.63 billion euros and 500 million euros. The Caisse de dépôt et de placement du Québec will thus become Alstom's largest shareholder with 17.8% of the company's capital, as stated in this morning's press release.

Thus, the subscription period for this capital increase runs from 19 to 30 November and the DPS listing period from 17 to 26 November. Among the shareholders who have undertaken to participate in this capital increase is the Bouygues group, which currently owns 9.7% of Alstom.

Finally, it should be noted that the completion of this buyback should take place in the first quarter of 2021, subject to regulatory approvals and the usual completion conditions.