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