Investment News | 7 August 2020
Green light for rail deal
Bombardier's deal, valued at more than six billion euros, with French company Alstom has received the green light, subject to EU conditions.
The combined Bombardier/Alstom business will create the world’s second largest train manufacturer, with the capacity to take on the top manufacturer, China’s CRRC Corp, and preserves a joint bid with Hitachi for the £2.75 billion contract to build new high-speed trains for HS2.
Daniel Desjardins, chairman of Bombardier Transportation, said: “The decision marks a positive step for the growth opportunities of the European rail sector, which is a world leader thanks to strong domestic competition and commitment to the next generation of green and digital mobility solutions.”
The proposed acquisition of train-maker Bombardier Transportation by Alstom can go ahead after being approved by EU regulators, subject to conditions.
Executive vice-president of the European Commission, Margrethe Vestager, in charge of competition policy, said: “Alstom and Bombardier are leading providers of state-of-the-art trains used every day by millions of passengers across the European Union.
“Thanks to the comprehensive remedies offered to solve the competition concerns in the areas of very high-speed, mainline trains and mainline signalling, the commission has been able to speedily review and approve this transaction.
“Going forward, a stronger combined Alstom and Bombardier entity will emerge.
Headquartered in Berlin, Bombardier Transportation’s UK train-making factory is in Litchurch Lane, Derby. The Derby site is currently busy delivering several major orders to key customers, including West Midlands Trains, Greater Anglia and South Western Railway.
Last month, it announced a further 100 new recruits would join the firm, while another 100 set to join in August. The company is looking to add even more workers following what it describes as “productive discussions” with its customers and the Government regarding mitigating the recent impact of Covid-19 on its delivery schedules.
Importantly for the Derby operation, according to the European Commission, Alstom has committed to a “series of measures” aimed at preserving Bombardier’s joint HS2 bid with Hitachi.
Daniel Desjardins added: “We are pleased that the European Commission has approved this transaction, based on a thorough review of the merits of the transaction and application of EU competition rules.
“I extend my personal appreciation to the European Commission’s team for their diligence and professionalism.”
