Business Alstom ready to sell a factory in France to...

Alstom ready to sell a factory in France to buy Bombardier Transportation

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Alstom announced Thursday July 9 that it will propose several measures to the European Commission in order to be able to buy out its competitor Bombardier Transportation. Alstom had notified last month its plans to buy the rail sector of the Canadian conglomerate Bombardier, for a price between 5.8 billion and 6.2 billion euros, to the European Commission, which has until July 16 to a first examination of the case.

“To respond to the initial concerns of the European Commission”, guardian of competition in Europe, “Alstom, in coordination with Bombardier Transportation and the Caisse de depot et placement du Quebec (CDQP), today announces its intention to submit a number of commitments”, explains the group in a press release.

Alstom proposes in particular to sell its regional trains for the French market, Coradia Polyvalent, and its production site in Reichshoffen, in the Bas-Rhin. The group also says it is ready to sell the Bombardier Talent 3 platform – self-propelled vehicles sold in Germany and Austria – as well as “Corresponding production facilities located at the Hennigsdorf site”, north of Berlin, Germany.

The company will also provide “Access to third parties for certain interfaces and products of the various Bombardier Transportation on-board signaling units and train control management systems”.

Finally, the new set would refocus on Alstom’s high-speed trains (TGV), after having transferred the contribution from Bombardier Transport to other high-speed trains (Zefiro V300).

Article reserved for our subscribers Read also The Caisse de depot et placement du Quebec, a close partner of France

Case closed in the first half of 2021

These commitments “Are subject to the approval of the European Commission”, says Alstom, which believes that the acquisition of Bombardier Transportation “Remains on track for a closing scheduled for the first half of 2021”.

In a separate press release, Bombardier said Thursday to confirm its “Support for Alstom’s commitments (…) relating to certain initial concerns of the European Commission regarding the acquisition of its Transport division by Alstom, including the disposal of certain assets currently held by Bombardier Transport “.

In February 2019, Brussels had vetoed a plan to take over Alstom by the German group Siemens, fearing an overly dominant position in Europe in railway signaling and high-speed trains.

With a combined turnover of more than 15 billion euros and an order book exceeding 75 billion, the Alstom-Bombardier marriage must create a powerful group, capable of facing the Chinese behemoth CRRC.

The two groups currently have a virtual monopoly on rolling stock in France, where they collaborate regularly, as on the Paris metro and the Ile-de-France RER.

” A betrayal “

The threat of Chinese competition had already been mentioned to justify the takeover of Alstom by Siemens; an operation that had been blocked in February 2019 by the European Commission, which feared an overly dominant position in Europe in railway signaling and high-speed trains.

Based in Berlin, Bombardier Transportation generated revenue of $ 8.3 billion in 2019, ending the year with an order book of $ 35.8 billion (33 billion euros). This Bombardier branch, 32.5% owned by the Caisse de depot et placement du Quebec (CDPQ), has, in Crespin, in the North, the largest railway plant in France, with 2,000 employees.

For its part, Alstom operates many smaller sites. The manufacturer has completed its 2019-2020 fiscal year (closed at the end of March) with a turnover of 8.2 billion euros, its order book peaking at 40.9 billion euros.

The coronavirus crisis should have an impact on the current year, but the group believes that it has sufficient cash to cope with it. Above all, this crisis has not started his motivation to take back his competitor.

For their part, the 780 employees of the Reichshoffen site fall from the clouds: “No one here thought that our factory was going to be sold. It’s more or less a betrayal, that’s what all the employees feel ”, lamented Daniel Dreger, CGT delegate. “We were very surprised. We are now awaiting the decision of the European Commission, but, for us, it is almost confirmed that Reichshoffen will be sold … We do not see how they could go back. “

Article reserved for our subscribers Read also By buying Bombardier for 6 billion euros, Alstom becomes number two in the world for trains

The World with AFP and Reuters

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