French rival ‘close to making a bid for Bombardier’
BOSSES REFUSE TO CONFIRM RUMOURS OF TIE-UP WITH ALSTOM
BOMBARDIER bosses have remained tight-lipped on reports that Alstom is set to make a firm offer to take over the rail business.
Rumours suggest that Bombardier’s French rival is poised to make a move for the company’s rail division as the Canadian-based group looks to reduce its sizeable debts.
Bombardier’s rail business is headquartered in Berlin, while its UK factory, in Litchurch Lane, Derby, is Britain’s largest train-making site.
The reports claim that Bombardier is considering offloading either its rail business or its corporate jet unit.
According to news agency Reuters, the Alstom board held a meeting on Wednesday night to discuss an approach, with one report suggesting that the train-maker had valued Bombardier’s rail business at just under $7 billion.
Bombardier shares rallied after the reports emerged – but so far, Alstom and Bombardier have both declined to comment.
Bombardier’s Litchurch Lane site is currently busy with a number of key orders. In November, the company announced a recruitment drive for 400 extra staff to help it on number of big orders at its factory in
adeliver hundreds of new carriages for Greater Anglia, South Western Railway and West Midlands Trains.
The company is also involved in a joint venture with Japanese trainmaker Hitachi, which is bidding for a £2.75 billion contract to build trains for HS2.
It is not the first time that Bombardier’s rail business has been linked with a possible takeover.
In 2017, rumours emerged that Bombardier was in talks with Germany’s Siemens about a possible merger.
And if the claims are true about Alstom looking to buy Bombardier, it would not be the first time that the French firm has tried to link up with another train-maker.
Last year, a planned tie-up between Alstom and Siemens collapsed due to European regulatory concerns. If the deal had been allowed to go ahead, it would have created the largest train-making business in Europe and could have seriously threatened the prospects of Bombardier’s Derby factory winning future work.
European Union competition regulators blocked the Alstom-Siemens deal, fearing the tie-up would hurt competition and lead to higher prices for consumers.
At the time, Daniel Desjardins, senior vice-president, general counsel and corporate secretary at Bombardier Inc, said: “It would have severely undermined the health and competitiveness of the whole European rail market, leaving European consumers, both as rail users and taxpayers, to pay the price.”