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Operation Alstom-Bombardier begins to stop China

Alstom negotiates to buy Bombardier’s train division to face competition from China

Alstom

The French train manufacturer Alstom negotiates to acquire Bombardier’s rail business.

Although nothing has been decided about it yet.

With this operation, Bombardier It seeks to alleviate the debt, while for Alstom it would allow it to face the competition that comes from China with the CRRC company, after CRRC is increasing global sales.

This is the second time Alstom attempts such an operation, after the failed merger with Siemens in Germany, which was blocked by the European Union as a monopoly.

At stake, $ 7 billion

Alstom could pay around 7 billion dollars, (about 6.5 billion euros) for the rail business, reported the German daily Handelsblatt.

Bombardier already announced to the market disappointing sales and losses of 1.35 billion euros in 2019. In addition, to having short-term payment commitments of 8.4 billion euros, which have forced the company to undertake asset sales.

To which is added the announcement that it will leave Airbus, where it collaborated in the construction of the A220 aircraft. This decision is due to the need to preserve cash.

The purchase of Alstom by Bombardier’s rail division, it would border on a monopoly by having 50% of the market and a leading position in the urban transport market in Europe, according to the analysis of the German consultancy SCI Verkehr. To avoid this, Alstom and Bombardier have discussed possible remedies to address antitrust concerns.

The operation could be announced today, according to the press. Bombardier would contribute more than 40,600 employees operating in 60 countries, while Alstom employs 32,000 employees.