Paris (AFP)

The French railway manufacturer Alstom announced on Wednesday the signing of the contract to acquire Canadian Bombardier Transport for a price revised downwards, which should not exceed 5.3 billion euros.

The completion of the operation, which should give birth to the world's number two rail, is now "expected for the first quarter of 2021", said the French group in a press release.

He previously expected a conclusion in the first half.

Its shareholders have yet to give the green light at an extraordinary general meeting scheduled for October 29.

"The acquisition price should reach up to 5.3 billion euros, after taking into account the estimated potential adjustments and obligations on the date of the completion of the operation," said the French manufacturer.

The final price will depend in particular on Bombardier Transportation's cash position at the time of the takeover.

The initial range of the transaction was between 5.8 and 6.2 billion euros, but Alstom had warned in August that it was going to take into account "unforeseen" difficulties within the rail branch of the Canadian group Bombardier in negotiations on the purchase price.

In the second quarter, Bombardier Transportation disclosed an unexpected charge of $ 435 million related "to additional engineering, certification and modification costs associated with a number of projects nearing completion mainly in the UK and in Germany".

Alstom said Wednesday that it was "confident in its ability to restore (...) the profitability of Bombardier Transport" and confirmed its "objective to generate 400 million euros in cost synergies per year".

The European Commission had conditionally authorized this takeover at the end of July, which took place a year and a half after the aborted marriage between Alstom and Siemens.

The new group employs - without deducting the cessions granted to satisfy Brussels - about 76,000 employees for a turnover of 15.5 billion euros.

He wants to be able to compete with the Chinese CRRC, by far the world number one in the sector.

-biggest railway factory in France-

"The acquisition of Bombardier Transport represents a transformative step for Alstom. It will allow the group to accelerate on its strategic roadmap and to strengthen its leadership in a dynamic market context", declared the CEO of the French manufacturer, Henri Poupart-Lafarge, quoted Wednesday in the press release.

Based in Berlin, Bombardier Transportation achieved 2019 sales of 8.3 billion US dollars (7 billion euros), ending the year with an order book of 35.8 billion dollars (30, 1 billion euros).

The group has the largest railway plant in France in Crespin (North), with 2,000 employees.

For its part, Alstom ended its 2019-20 financial year (ended at the end of March) with a slight increase in turnover, to 8.2 billion euros.

Its order book peaks at 40.9 billion euros.

It operates many smaller sites in France, including the Reichshoffen plant in Alsace, which employs 780 people and will have to be sold to meet the requirements of the European competition authorities.

"The financing structure of the acquisition remains identical to that communicated previously (...). As announced last February, under the new terms of the acquisition, the Caisse de depot et placement du Québec (CDPQ) will become the first Alstom shareholder with around 18% of the capital and voting rights, ”Alstom said.

CDPQ is the largest shareholder of Bombardier Transport, in which it holds 32.5% of the capital.

By selling its rail branch, Bombardier is refocusing on its other major activity: aircraft construction.

"Today's announcement marks an important step (...) in the repositioning of Bombardier as a company focused on business aircraft," said Eric Martel, President of Bombardier, quoted in a separate press release.

"The proceeds of this transaction will allow us to begin to reshape our capital structure and to clean up our balance sheet by reducing debt."

© 2020 AFP