Paris (AFP)

The French railway manufacturer Alstom became the world number two in the sector on Friday by completing the acquisition of its competitor Bombardier, which allows it to complete its range of products and its geographical presence, with a very strong position in France.

Alstom will spend a total of 5.5 billion euros to buy 100% of Bombardier Transport.

The group will concretely pay 4.4 billion euros to the Canadian group to resume its railway activities, to which are added 1.1 billion that it will have to resume to cover negative cash flow and "other contractual adjustments".

This is much less than the price of 5.8 to 6.2 billion euros put forward when the operation was announced in February 2020 and in the lower end of the range of 5.5 to 5.9 billion reassessed in September. .

Alstom becomes the world number two in the sector with a combined turnover of 15.7 billion euros and 75,000 employees in 70 countries, including 17,500 engineers.

China's CRRC is still far ahead with nearly 29 billion euros (in 2019), Siemens Mobility being third at 9 billion.

CEO Henri Poupart-Lafarge hailed in a press release the creation of "a new world-class leader focused on sustainable and intelligent mobility", with an order book of 71.1 billion euros.

The group is delighted to have in its new configuration "unparalleled commercial influence in all geographies", thanks to the good complementarity of Alstom and Bombardier Transport, which until now had roughly comparable sizes.

In fact, Alstom is well established in France, Italy, Spain, India, South East Asia, North Africa and Brazil, while Bombardier Transport - a fairly decentralized structure, based in Berlin - was well established in the UK, Germany, the Nordic countries, China and North America.

In rolling stock, Bombardier brings specialties hitherto ignored by Alstom, such as the monorail, the "people mover" (small automatic metro mainly used in airports), the meter gauge tram or certain types of locomotives.

- Sale of Reichshoffen -

Its products will soon bear the logo of the new owner.

"There is no reason to keep the Bombardier name for trains," Poupart-Lafarge told AFP.

Bombardier Transportation also brings certain problem contracts (with delivery delays, penalties to pay and often profitability problems), which management will have to "stabilize", according to the CEO.

The rail branch of the Canadian group was also in deficit on the first nine months of 2020 (latest figures known), and leaves a negative cash flow.

"Obviously, the margin will be very diluted at the start," warns Mr. Poupart-Lafarge, who will set new financial objectives this summer.

Alstom will now employ around 11,500 people in France, with estimated sales of 3.2 billion euros - 30% of which are for export.

The acquisition of Bombardier Transport gives Alstom the largest railway plant in the country, in Crespin (North).

The association of the two players will be dominant on the French market, where only the German Siemens and the Spanish CAF have so far placed their products.

The period of competition between Alstom and Bombardier also ends with a controversy, the first having blocked in court the award to the second, allied to CAF, of a large contract for new trains of the Ile-de-France RER.

Alstom has undertaken to obtain the green light from the European Commission to sell the Reichshoffen plant (Bas-Rhin), as well as the production of the TER Regiolis series produced there.

The group is in negotiations with the Czech Skoda Transportation, but "it is a little longer than expected", according to Mr. Poupart-Lafarge.

Skoda is also due to take over part of the German plant in Hennigsdorf, near Berlin, and the production line for regional trains for the German and Austrian markets.

Still to satisfy Brussels, the Japanese group Hitachi will at the same time take back Bombardier's 50% stake in the Italian high-speed Zefiro V300 trains.

Alstom changes in the operation of reference shareholder, the Caisse des Dépôts et Placement du Québec now holding 17.5% of the capital, while Bouygues has fallen to around 6%.

© 2021 AFP