Bombardier Inc. has sold its rail-building unit to French train giant Alstom SA, marking its exit from the rail business.
On Monday, Alstom announced it had secured a deal with Bombardier and major shareholder Caisse de dépôt et placement du Québec to acquire Bombardier Transportation for a price of 5.8 to 6.2 billion euros ($8.4-$9 billion Cdn) in stock and cash.
“I’m very proud to announce the acquisition of Bombardier Transportation, which is a unique opportunity to strengthen our global position on the booming mobility market,” Henri Poupart-Lafarge, chairman and CEO of Alstom, said in a news release.
Alstom gains a bigger footprint in the North American market and hopes to fend off rivals such as China’s state-owned CRRC, the world’s largest train maker.
Poupart-Lafarge pledged a “turnaround” at Bombardier Transportation that would deliver value to customers and further develop its operations in Quebec. Caisse remains a major shareholder, having negotiated a cash and share swap that will see it take a stake in Alstom.
More to come.