On February 29, 2021, the French train manufacturer Alstom finalized the acquisition of its Canadian competitor Bombardier Transportation. From now on, Alstom is the world N°2 in the sector behind the Chinese giant CRRC.
As early as February 2020, Alstom had announced the acquisition of Bombardier’s rail operations after the difficulties encountered by the Canadian group. Despite a particular discretion regarding the cost of this acquisition, the transaction would have cost the French group a maximum of €5.3 billion. Consequently, the transaction gave birth to a group with a turnover of €15.7 billion and an order book of €71.1 billion. Despite being 2nd in the world behind the Chinese railway giant CRRC, Alstom now holds a dominant position in France.
Headquartered in Berlin, Bombardier Transportation generated revenues of $8.3 billion in 2019. Bombardier had France’s largest railway manufacturing plant in Crespin, with 2,000 employees. Alstom is taking over this production site, and now employs around 11,500 people in France and 75,000 worldwide. Until now, Alstom and Bombardier were competing in a quasi-duopoly situation. From now on, their association will be totally dominant in France. Only Siemens and the Spanish company CAF remain on the French market.
A contested acquisition:
While this takeover is positive for Alstom and Bombardier, it is nevertheless contested and criticized. First of all, the SNCF does not see this takeover in a positive way. Already heavily in debt after a catastrophic year 2020, the SNCF sees the loss of a competing supplier to Alstom’s hegemony in France and fears the almost total monopoly of this “new” group.
Moreover, Alstom, which is taking control of Bombardier, considers that the offer that had been accepted by SNCF and RATP for the renewal of 146 RER trains by Bombardier is not financially viable. As a result, the SNCF and RATP are threatening legal action.
In the same way as the SNCF, the other European players in the sector criticize this acquisition, which allows the emergence of a new European rail giant.
The European Commission, for its part, had given its approval on July 31, subject to certain conditions, in particular the sale of assets in France, Germany and Italy.
The two former groups are now a single company. Bombardier Transportation will be fully integrated into Alstom and its divisions will now carry the name of the French group. Caisse de dépôt et placement du Québec (CDPQ) becomes the group’s largest shareholder with 18% of the capital.
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