Sale of Bombardier rail unit to Alstom could close sooner

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MONTREAL – Bombardier Transportation will sell its rail division, including its Thunder Bay plant, to French train maker Alstom, for less than the parties agreed earlier this year.The price is US $ 8.4 billion, which is $ 350 million less than the original deal.

Bombardier says this reduction is somewhat offset by a more favorable exchange rate between the US dollar and the euro.

The company now expects its net proceeds to be around $ 4 billion, including $ 585 million in Alstom shares.

“Today’s announcement marks an important step towards realizing our short-term priorities and repositioning Bombardier as a premier business aircraft company,” said Eric Martel, President and CEO of management.

The proceeds will be used to repay Bombardier’s debt.

Another important part of Wednesday’s announcement is that both companies hope to close the sale in the first quarter of 2021, rather than the first half.

Some regulatory approvals are still needed.

Uncertainty over the future of the Thunder Bay plant hung over the local workforce long before Bombardier and Alstom began negotiations last year.

When he visited the city last month to announce a new round of layoffs due to a shortage of work, Bombardier Transportation Americas COO David Van der Wee said: “At the end of 2021, there is simply nothing left on the pipeline. ”

He called it “today’s problem… not tomorrow’s problem,” saying decisions about getting new orders for the plant must be made now.



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