Train: There are usu­ally net ben­e­fit tests that have to be passed

China Daily (Canada) - - FRONT PAGE -

Bur­ton also said that “the po­lit­i­cal sen­si­tiv­ity of the ac­qui­si­tion of Bom­bardier’s rail­way unit by Chi­nese state en­ter­prises is much less than for­eign state ac­qui­si­tions in Canada’s nat­u­ral re­sources sec­tor like min­ing and oil’’.

“With re­spect


the Canadian gov­ern­ment, I couldn’t say,” wrote Ty­er­man. “There are usu­ally net ben­e­fit tests that have to be passed. How­ever, other ju­ris­dic­tions may be more im­por­tant as Bom­bardier Trans­porta­tion is based in Europe (head­quar­ters are in Ber­lin) and it has the ma­jor­ity of its op­er­a­tions and sales there. I would think Siemens, Al­stom and other can­di­dates” might eval­u­ate Bom­bardier Trans­porta­tion, he said. “Again, this could be for much smaller ac­tions than a full sale – for ex­am­ple, JVs in spe­cific ar­eas or projects. And an­titrust reg­u­la­tory con­cerns would have to be con­sid­ered.”

Ty­er­man said it is pos­si­ble that there would benefits from com­bin­ing with other play­ers in the rail sec­tor, in­clud­ing im­prov­ing tech­nol­ogy across the com­bined en­tity or im­prov­ing mar­ket ac­cess or the fi­nan­cial ca­pa­bil­ity of the com­bined group.

Reuters said CNR and CSR may not be able to move for­ward on any dis­cus­sions with the Bom­bardier unit un­til the two con­cerns com­plete a $26 bil­lion merger. The high-speed rail man­u­fac­tur­ers an­nounced their merger late last year to com­pete more ef­fec­tively against global ri­vals and as part of the cen­tral gov­ern­ment’s plan to con­sol­i­date some Sta­te­owned en­ter­prises.

Bom­bardier Trans­porta­tion also has a plant in Thun­der Bay, On­tario, that makes street and sub­way cars and em­ploys about 1,300. Ac­cord­ing to a re­port in the Toronto Star last year, Bom­bardier Trans­porta­tion was the world’s third-largest maker of rail­way equip­ment in 2013, af­ter CNR and CSR, ac­cord­ing to Euro­pean mar­ket re­search firm Xerfi Global. It had sales of $8.8 bil­lion in 2013.

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