Mr. Eric Martel reports
BOMBARDIER AND ALSTOM SIGN DEFINITIVE AGREEMENT FOR SALE OF TRANSPORTATION BUSINESS
Bombardier Inc. has signed a definitive sale and purchase agreement (SPA) with Alstom SA and the Caisse de depot et placement du Quebec for the sale of its transportation business to Alstom.
All monetary amounts are in United States dollars unless otherwise stated.
Under the SPA, Bombardier and la Caisse will sell their interests in Bombardier Transportation to Alstom on the basis of an enterprise value of $8.4-billion, reflecting a $350-million price reduction from the previously announced memorandum of understanding (MOU), offset by the impact of a more favourable currency exchange rate.
Based on Bombardier Transportation's current operational performance and market conditions, total proceeds after the deduction of debt-like items, transferred liabilities and estimated closing adjustments are expected to be $6.2-billion, based on the lower end of the range agreed to in the SPA. After deducting la Caisse's equity position of $2.2-billion, Bombardier expects net proceeds of approximately $4-billion. This amount includes $585-million of Alstom shares for a fixed subscription price of 47.50 euros per share, monetizable after a three-month lock-up postclosing.
"Today's announcement marks a significant milestone towards achieving our near-term priorities and repositioning Bombardier as a pure-play business jet company," said Eric Martel, president and chief executive officer of Bombardier. "The proceeds from this transaction will allow us to begin reshaping our capital structure and start addressing our balance sheet through debt paydown, so that we can achieve the full potential of our incredibly talented employees and our industry-leading business jet portfolio."
The signing of the SPA follows the completion of the required works council consultations. With regulatory approvals obtained from several jurisdictions, including the European Commission, the transaction closing is now expected in the first quarter of 2021, subject to the completion of the remaining regulatory reviews and other customary closing conditions, as well as Alstom shareholders' approval at the company's upcoming Oct. 29, 2020, extraordinary shareholders' meeting.
With nearly 60,000 employees across two business segments, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Its products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.
Headquartered in Montreal, Canada, Bombardier has production and engineering sites in over 25 countries across the segments of aviation and transportation.
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