- Sale based on enterprise value of $8.4 billion (EUR 7.15B), reflecting a post-MOU $350M (€300M) price reduction, offset by positive foreign currency impact
- Net proceeds to Bombardier expected to be ~$4.0B at closing
- Closing now expected in the first quarter of 2021, subject to customary closing conditions and remaining regulatory approvals
All amounts in this press release are in U.S. dollars unless otherwise indicated. Amounts in EUR in this press release are converted to USD at an approximate 1:1.17 exchange rate.
MONTREAL – Bombardier (TSX: BBD.B) today announced that it has signed a definitive Sale and Purchase Agreement (SPA), with Alstom SA and the Caisse de dépôt et placement du Québec (“la Caisse”) for the sale of its Transportation business to Alstom.
Under the SPA, Bombardier and la Caisse will sell their interests in Bombardier Transportation to Alstom on the basis of an enterprise value of $8.4 billion (EUR 7.15B), reflecting a $350M (EUR 300M) price reduction from the previously announced Memorandum of Understanding (MOU), offset by the impact of a more favourable currency exchange rate.
Based on Bombardier Transportation’s current operational performance and market conditions, total proceeds after the deduction of debt-like items, transferred liabilities and estimated closing adjustments1 are expected to be $6.2B, based on the lower end of the range agreed to in the SPA. After deducting la Caisse’s equity position of $2.2B billion, Bombardier expects net proceeds of ~ $4.0B2. This amount includes $585M (EUR 500M) of Alstom shares for a fixed subscription price of EUR 47.50 per share, monetizable after a three-month lock-up post-closing.
“Today’s announcement marks a significant milestone towards achieving our near-term priorities and repositioning Bombardier as a pure-play business jet company,” said Éric Martel, President and Chief Executive Officer, Bombardier Inc. “The proceeds from this transaction will allow us to begin reshaping our capital structure and start addressing our balance sheet through debt paydown, so that we can achieve the full potential of our incredibly talented employees and our industry-leading business jet portfolio.”
The signing of the SPA follows the completion of the required works council consultations. With regulatory approvals obtained from several jurisdictions, including the European Commission, the transaction closing is now expected in the first quarter of 2021, subject to the completion of the remaining regulatory reviews and other customary closing conditions, as well as Alstom shareholders’ approval at the company’s upcoming October 29, 2020 Extraordinary Shareholders’ Meeting.
With nearly 60,000 employees across two business segments, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Our products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.