Alstom SA: A transformational step for Alstom: completion of the
acquisition of Bombardier Transportation
A
transformational step for Alstom: completion of the acquisition of
Bombardier Transportation
- Creation of a global mobility leader committed to respond to
the increasing need for greener transportation worldwide
- Comprehensive product portfolio, unparalleled R&D
innovation capabilities, extensive commercial reach, leveraging the
many complementarities of the two groups
- 75,000 diverse and experienced employees in 70 countries to
serve clients globally
- Strengthened long-term shareholding profile and value creation
for all stakeholders
29 January 2021 – Alstom
announces today the completion of the acquisition of Bombardier
Transportation. Leveraging on its clear Alstom in Motion strategy
and its strong operational fundamentals and financial trajectory,
Alstom, integrating Bombardier Transportation, will strengthen its
leadership in the growing sustainable mobility market by reaching a
critical size in all geographies and integrating further solutions
and assets to better serve its customers worldwide.
The enlarged Group has a combined proforma
revenue of around €15.7 billion1 and a €71.1 billion2 combined
backlog. It employs 75,000 people worldwide in 70 countries, has
unparalleled R&D capabilities and a complete portfolio of
products and solutions.
“Today is a unique moment for Alstom and the
mobility sector worldwide, with the creation of a new global leader
centered on smart and sustainable mobility. More than ever, the
world has to engage in a deep environmental and social transition
to be able to address the great challenges of urbanization, equal
opportunity to economic development and climate change.
Transportation, essential to the working and social life but with
great environmental impact is at the heart of this transition. Our
responsibility, together with the 75,000 people of Alstom today, is
to transform our unique set of assets created by this transaction
into the enabler of this necessary transformation. Our
responsibility is to bring the innovation required for such extreme
challenges and that all communities throughout the world, as they
are traveling to meet loved ones or to work, can have access to the
same quality of service and efficiency, while caring for our
planet.” said Henri Poupart-Lafarge, Chairman and CEO of
Alstom.
A new global leader in smart and
sustainable mobility
A group serving a growing
market
The rail market is supported by fundamental
growth drivers, such as accelerated urbanisation, public investment
strategies, and the worldwide push for green and digital
transformation of transport systems. Despite the pandemic, recent
stimulus announcements clearly confirm the development of
sustainable mobility and more specifically of rail as a long-term
priority. The rail manufacturing market is expected to grow at a
2.3% CAGR by 20253.
An increased worldwide reach, building
on complementarities of the two groups
The Group will have an unparalleled commercial
reach in all geographies thanks to the complementarities of the two
companies. While the Alstom Group already had a well-established
customer base in France, Italy, Spain, India, South East Asia,
Northern Africa and Brazil, Bombardier Transportation will bring
strong customer proximity in strategic markets such as the
United-Kingdom, Germany, the Nordics, China, and North America. The
Group will have now in particular very strong capabilities in
Europe and North America, which represent approximately 75% of the
OEM accessible market.
As previously announced, the headquarters of
Alstom of the Americas will be based in Montréal, Québec – leading
all operations in the region – as well as establishing a centre of
excellence for design and engineering that will build on Québec’s
well-established strengths in innovation and sustainable
mobility.
Alstom will be even closer to its clients and
able to leverage its knowledge of mobility worldwide to offer the
best, fit-for-purpose mobility solutions.
A complete portfolio of rail products
and solutions, strengthened product lines
The Group will offer mobility operators and
network providers products and solutions throughout the entire rail
value chain. Integrating Bombardier Transportation, Alstom will
have the most complete rail portfolio. In Rolling Stock, its
portfolio will range from light rail to very high-speed trains,
including new strategic products such as people mover and monorail.
The Group will be able to serve its clients in the Services space
with a wider maintenance facilities network and larger predictive
maintenance capabilities. With a fleet of 150,000 vehicles, Alstom
will have the largest installed base worldwide, a unique
springboard to further expand its leadership in Services. Its
Signalling product line gains significant scale, becoming No. 2
worldwide4 in terms of revenue, acquiring technological
capabilities and commercial capacities in strategic markets,
complementary to Alstom’s.
A global and balanced footprint to serve
clients worldwide
The Group will have access to further strategic
industrial capacities with competitive industrial footprint across
both mature markets, such as Western Europe, North America,
Australia, and growing markets, including Eastern Europe, Mexico
and India. Bombardier Transportation brings hubs of expertise for
locomotives and bogies in Germany, monorail and people movers in
Canada, suburban and regional trains in France and the
United-Kingdom, traction in Sweden, along with engineering centres
in best cost countries in Thailand. It brings also seven
well-established joint-ventures in China. With those immediate
strategic additions to Alstom’s already diversified footprint, the
enlarged Group has access to deeper industrial expertise and is
closer to its customers.
Unparalleled R&D capabilities to
fuel green and smart innovation
Alstom is already a pioneer in mobility with
leading innovations such as the recent hydrogen train, autonomous
train operation, energy efficient rolling stock and infrastructure.
Bringing together c.17,500 engineering and R&D talents from
both groups, consolidating a rich legacy of 10,000 patents and
incorporating significant additional technologies from Bombardier
Transportation, for example in predictive maintenance, signalling
and digital operations, the Group will be able to develop solutions
at a faster pace and on a larger scale to make mobility of tomorrow
a reality. Alstom is accelerating towards its ambition: be the
global innovative player for a sustainable and smart mobility.
Confirmed long-term value creation for
all stakeholders
Customers and passengers will benefit from the
proximity of Alstom’s employees and sites, unmatched innovation
capacities, a comprehensive rail product & solutions portfolio,
and commitment to an efficient delivery.
The employees of Bombardier Transportation join
the Alstom Group as from January 29, 2021. These new talents will
enrich Alstom’s operational profile at all levels and build, with
Alstom’s employees, one agile, inclusive and responsible Alstom
team.
With rail being the lowest CO2 emissive
motorized mode of transportation, the Group is more than ever
focused on its ambition to decarbonize mobility. Alstom reaffirms
its commitments to create a positive impact in the communities it
operates, to provide employees with the best working environment
and experience, and to be at the highest standards in terms of
responsible business practices.
Alstom confirms its objective to generate €400
million cost synergies on annual run rate basis by the fourth to
fifth year5 and to restore Bombardier Transportation’s margin to a
standard level in the medium term. The transaction is
expected to be double digit EPS accretive from year 2 post
closing6 and to preserve Alstom’s strong credit profile with a
Baa2 rating.
Shareholding and governance: a new main
shareholder with a long-term investment approach
CDPQ (Caisse de dépôt et placement du Québec)
today becomes Alstom’s main shareholder with 17.5% of Alstom’s
share capital. CDPQ is committed to a long-term shareholder
approach with a strong track record of investing in infrastructure
and transport assets.
Bouygues now holds approximately 6% of Alstom’s
share capital.
In accordance with the resolutions approved by
the Alstom’s Shareholders’ Meeting held on October 29, 2020, Ms Kim
Thomassin, representing CDPQ, and Mr Serge Godin joined today
Alstom’s Board of Directors. Mr Benoit Raillard has been appointed
by Alstom’s Board of Directors as observer (censeur) upon CDPQ’s
proposal.
Price and Financing
The reference price was established at €5.5
billion, at the bottom of the range of €5.5 billion to €5.9 billion
communicated on September 16th, 2020. The proceeds for the
acquisition were established at €4.4 billion, which include the
impact of the minimum cash adjustment mechanism based on a negative
net cash position of Bombardier Transportation as of December 31st,
2020 and other further contractual adjustments for an amount of
€1.1 billion.
The acquisition was financed7 through the rights
issue of around €2 billion completed on December 7, 2020, and part
of the senior bond issuance of €750 million completed on January
11, 2021, and by the reserved capital increases to the benefit of
affiliates of CDPQ and Bombardier Inc., in total amounts,
respectively, of €2.6 billion and €500 million completed today as
part of the closing of the transaction8.
Next steps
Alstom will pursue and finalize sales of certain
assets of the combined Group in line with the commitments described
in the European Commission’s press release on July 31st, 2020. The
divestitures will comply with all applicable social processes and
consultations with employee representatives’ bodies.9
Alstom will hold a Capital Markets Day in the
summer.
1 Unaudited pro forma combined revenue for the 12-month period
ended March 31, 2020
2 Calculated by adding up Alstom backlog as of June 2020
(€41.2bn) and Bombardier Transportation backlog as of June 2020
($33.7bn converted at 1.1284 EUR/USD rate). Bombardier
Transportation’s backlog figure has not been reviewed for
methodological consistency with Alstom’s
3 CAGR between 2017-2019 and 2023-2025 for OEM market - UNIFE
Market Study 2020, central scenario (V-shape)
4 Revenue of signalling activities, based on competitors last
publicly available fiscal year (€bn). All figures coming from
competitors company fillings, Player #1 and Player #4 completed
with Alstom internal estimations; Excluding competitors with a main
focus on Chinese domestic market
5 Post-closing of the acquisition
6 After cost synergies and implementation costs, and before PPA
amortization
7 The financing proceeds will also contribute to finance the net
debt/ cash position of Bombardier Transportation
8 CDPQ’s affiliate, CDP Investissements Inc., subscribed for
64,680,147 new ordinary shares and Bombardier Inc’s affiliate,
Bombardier UK Holding Limited, subscribed for 11,504,149 new
ordinary shares respectively at adjusted subscription prices of
approximately €40.67 and approximately €43.46, adjustment resulting
of the completion of right issue on December 7, 2020
9 Alstom will adhere to its divestment and behavioral
commitments as part of the European Commission clearance of the
acquisition. Details on the behavioral commitments relating
to certain on-board units and train control management systems
including relevant contact details are available at
https://www.alstom.com/obu-commitments
About Alstom |
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Leading societies to a low carbon future, Alstom develops and
markets mobility solutions that provide the sustainable foundations
for the future of transportation. Alstom’s products portfolio
ranges from high-speed trains, metros, monorail, trams and e-buses
to integrated systems, customised services, infrastructure,
signalling and digital mobility solutions. With Bombardier
Transportation joining Alstom on January 29, 2021, the new Group’s
combined revenue amounted to €15.7 billion for the 12-month period
ended March 31, 20201. Headquartered in France, Alstom is now
present in 70 countries and employs 75,000 people.
www.alstom.com¹unaudited proforma |
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Contacts |
Press: Samuel MILLER - Tel.: +33 (1) 57 06 67
74Samuel.miller@alstomgroup.com Coralie COLLET - Tel.: +33 (1) 57
06 18 81coralie.collet@alstomgroup.com Investor
relations:Julie MOREL - Tel.: +33 (6) 67 61 88
58Julie.morel@alstomgroup.comClaire LEPELLETIER – Tel.: +33
(6) 76 64 33 06claire.lepelletier@alstomgroup.com |
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