Thursday February 13, 2020
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The merger of the railway technology business units of Siemens and Alstom fails due to the veto of the EU Commission. Now the French company is trying its luck in Canada – and is about to take over the railway division from Bombardier. Their course rises significantly.
Media reports and market speculations about an alleged sale of the railway business to the French railway technology manufacturer Alstom have given the Bombardier Group a strong boost on the stock exchange. The shares of the ailing Canadian company closed in Toronto with a price increase of more than ten percent.
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According to “Handelsblatt” information from industrial circles, Alstom wants to take over the entire train division of the Canadians for seven billion euros. According to the company, Bombardier Transportation has around 40,650 employees; the division’s headquarters are in Berlin. The Bombardier Group, whose second mainstay is aircraft construction, has a total of more than 68,000 employees.
The financial news service Bloomberg and French media had previously reported on talks between the groups. Investors have been speculating about division sales for a long time anyway. Bombardier and Alstom spokesmen said they would not comment on market rumors.
Resistance from antitrust authorities?
According to the “Handelsblatt”, the takeover should be announced on Thursday morning. In the meantime, the Japanese train builder Hitachi was also interested. The deal between Alstom and Bombardier creates a new large railway technology group with a turnover of around 15 billion euros.
However, the transaction may encounter opposition from the anti-trust authorities. Alstom had failed just a year ago due to concerns from the European Competition Commission trying to merge with Siemens Mobility. The guards stopped the merger despite warnings of an increasing threat from Chinese competition. In 2017 there had already been speculation that Bombardier and Siemens could merge their train divisions.
Bombardier’s profit warning
Bombardier has been struggling for a long time. The Canadians had shocked the capital market with a profit warning last month. The background to the half-cut expectation of profit development in the past year is also the poorly running railway business. According to the French financial broadcaster BFM, Alstom and Bombardier have been negotiating a deal for weeks.
Alstom recently received orders for € 3.6 billion, including a major order for the rail network in the Australian metropolis of Perth, as the company announced in mid-January. The company recorded the highest value in a quarter in the current financial year. Alstom currently has around 36,300 employees in 60 countries.
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