Alstom to Acquire Bombardier for Approximately €6.2 Billion

February 17, 2020

Cleary Gottlieb is representing Alstom in its €5.8 to €6.2 billion acquisition of Bombardier Transportation.

On February 17, 2020, Alstom signed a memorandum of understanding with Bombardier Inc. and Caisse de dépôt et placement du Québec (CDPQ) in view of the acquisition of 100% of Bombardier Transportation.

The transaction brings together two preeminent rail players in a very positive market environment. The price of the acquisition of 100% of Bombardier Transportation shares will be from €5.8 billion to €6.2 billion (floor and cap subject to closing mechanisms), which will be paid via a mix of cash and new Alstom shares. CDPQ will reinvest c. €2 billion corresponding to 100% of cash proceeds to be received from the sale of its stake in Bombardier Transportation and further invest €0.7 billion in Alstom. It will become the largest shareholder of Alstom with c. 18% of capital after equity raising. Bouygues will remain a shareholder of Alstom with around 10% of capital post equity raising transactions including rights issue. Bouygues is fully supportive of the transaction and undertook to vote in favor of the transaction-related resolutions at the EGM.

Existing Alstom shareholders will be offered the possibility to accompany Alstom in the financing of this acquisition through a rights issue, subject to EGM approval to take place no later than October 31, 2020. CDPQ will be committed to a 21-month lock-up undertaking from closing and a 22% standstill. Following closing, it will appoint two board representatives and one observer (censeur).

Post-transaction, Alstom will have a backlog of around €75 billion and revenues around €15.5 billion. The acquisition of Bombardier Transportation will bring to Alstom strong commercial and product complementarities together with strengthened product lines and strategic industrial capacity. Significant additional technologies and added R&D resources will be also brought to Alstom.

The group will develop its presence in Québec, Canada, and Montréal will become the Americas’ headquarters of Alstom. In addition, Alstom will also establish a center of excellence for design and engineering, as well as high-tech R&D activities, which will focus on developing sustainable mobility solutions.