Alstom announced today that it signed the sale and purchase agreement[1] with Bombardier Inc and Caisse de depot et placement du Quebec (CDPQ) for the acquisition of Bombardier Transportation.
'The acquisition of Bombardier Transportation represents a transformational change for Alstom. It will enable the Group to accelerate on its strategic roadmap and strengthen its leadership in the context of a dynamic market, at a time where sustainable transportation is at the heart of the global agenda.
Bombardier Transportation will bring to Alstom complementary geographical presence to broaden Alstom's commercial reach in key growing markets, strong product complementarities in rolling stock, strategic scale in services and signalling, industrial capacity in key countries, a leading portfolio offering and additional R&D capabilities to invest in green and smart innovation. Alstom will also welcome new talent and expertise, with the arrival of Bombardier Transportation employees.', said Henri Poupart-Lafarge Chairman and CEO of Alstom.
Terms of the agreement have been adapted to the current situation. A EUR300m reduction in the price range has been agreed with Bombardier Inc and CDPQ. Excluding any further downward adjustments linked to the net cash protection mechanism[2], the price range for the acquisition of 100% of Bombardier Transportation shares will be therefore EUR5.5bn to EUR5.9bn[3].
Alstom considers that the proceeds are likely to amount up to EUR5.3 bn, based on estimated potential post-closing adjustment and obligations linked to the net cash protection mechanism2, compared to the EUR5.8bn - EUR6.2bn range communicated on February 17th,2020.[4]
The financing structure remains the same as communicated previously, in particular the size and terms of the rights issue and the reserved capital increases of CDPQ and Bombardier Inc. As announced last February, pursuant to the new terms of the acquisition, CDPQ will become the largest shareholder of Alstom with approximately 18% of the share capital and voting rights.
Alstom is convinced of the strong strategic rationale for the acquisition and is confident in its ability to recover Bombardier Transportation's commercial, operational and profitability potential. Alstom confirms its objectives to deliver EUR400m run rate cost synergies in year 4 to 5 and to restore Bombardier Transportation margin towards standard level in the medium term. The transaction is expected to be double digit EPS accretive in year 2 post closing[5] and to preserve Alstom's strong credit profile with a Baa2 rating.
Alstom's Board of Directors approved these new terms and is confident in Alstom's capacity to deliver strong value creation for all stakeholders through this acquisition.
Following positive progress on antitrust regulation process, the closing of the transaction is now expected for Q1 2021 subject to regulatory approvals and customary closing conditions, with an extraordinary shareholders' meeting to be held on October 29th 2020.
IMPORTANT NOTICE
This press release does not constitute or form part of a prospectus or any offer or invitation for the sale or issue of, or any offer or inducement to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for any shares or other securities in the Company in France, the United Kingdom, the United States or any other jurisdiction. Any offer of the Company's securities may only be made in France pursuant to a prospectus having received the visa from the AMF or, outside France, pursuant to an offering document prepared for such purpose.
This announcement includes forward-looking statements, including but not limited to statements relating to Alstom's and Bombardier's beliefs and expectations regarding the acquisition of Bombardier Transportation by Alstom and expectations regarding the proposed transaction, benefits that would be afforded to customers, benefits that are expected to be obtained as a result of the proposed transaction and the relevant parties' ability to enhance shareholder value through, among other things, the delivery of cost savings and expected synergies. These statements are based on certain assumptions and reflect Alstom's and Bombardier's current expectations. These forward-looking statements may be identified by words such as 'expect,' 'look forward to,' 'anticipate,' 'intend,' 'plan,' 'believe,' 'seek,' 'estimate,' 'will,' 'project' or words of similar meaning. Alstom or Bombardier may also make forward-looking statements in other reports, in presentations, in materials delivered to shareholders and in press releases. In addition, Alstom's or Bombardier's representatives may from time to time make oral forward-looking statements. Such statements are based on the current expectations and assumptions of Alstom's and Bombardier's respective management teams, and depend on numerous factors that are beyond Alstom's or Bombardier's control.
These forward-looking statements are subject to a number of risks, uncertainties and factors, including but not limited to: the failure of Alstom's shareholders to approve the proposed transaction; the effect of regulatory conditions, if any, imposed by regulatory authorities; the reaction of Alstom's and Bombardier's customers, employees and suppliers to the proposed transaction; the ability to promptly and effectively integrate the business of Bombardier Transportation within of Alstom; the diversion of management time on transaction-related issues and those risks described in disclosures that have been made or may be made with regulatory authorities such as the French Autorite des marches financiers (the 'AMF') and/or the Autorite des marches financiers (Quebec). Should one or more of these risks or uncertainties materialize, or should underlying expectations or assumptions prove to be incorrect, the actual results, performance, financial condition and prospects of Alstom or Bombardier may vary materially from those expressed or implied in the relevant forward-looking statements. The proposed transaction is subject to various regulatory approvals and the fulfilment of certain conditions, and there can be no assurance that any such approvals will be obtained and/or such conditions will be met.
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