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Jul 31, 2020

Alstom's Bombardier rail takeover wins conditional EU approval

Bombardier out of TSX Composite Index


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Alstom SA won conditional European Union approval for its 6.2 billion euro (US$7.3 billion) takeover of Bombardier Inc.’s rail-transport business.

The European Commission said Alstom’s offer to sell train production plants and exit a high-speed train project eliminated potential concerns about the deal, which creates the world’s second-biggest maker of train-related supplies after China’s CRRC Corp.

“Thanks to the comprehensive remedies offered to solve the competition concerns in the areas of very high-speed, mainline trains and mainline signaling, the commission has been able to speedily review and approve this transaction,” EU Antitrust Commissioner Margrethe Vestager said in an emailed statement on Friday.

Alstom offered earlier this month to divest its regional Coradia Polyvalent train and Reichshoffen production site in France. It also promised to transfer Bombardier’s contribution to the V300 ZEFIRO very high-speed train and sell off the Bombardier TALENT 3 platform and dedicated production facilities located within the Hennigsdorf site in Germany.

The package includes providing rivals with access to certain interfaces and products for some of Bombardier Transportation’s signaling on-board units and train control management systems.

The final commitments address EU antitrust concerns “and were significantly improved following the feedback received by market participants,” the Brussels-based commission said. The EU approval is based on full compliance with these remedies.

Alstom Chief Executive Officer Henri Poupart-Lafarge told French lawmakers last week that the deal was “on a good path” toward approval. He said it was too early to name a buyer for Alstom’s Reichshoffen plant, which it has offered to sell. CRRC would not be buying it, he said.

Alstom’s separate attempt to merge its rail operations with Siemens AG ran into an EU veto last year. Regulators blamed the companies for not making concessions that fully addressed worries about the combined firm’s power over railway signaling systems and the next generation of very-high-speed trains.