Bombardier has made the strategic decision to focus exclusively on business aviation and plans to accelerate its deleveraging through the sale of its rail business.
“Today marks an exciting new chapter for Bombardier. Going forward, we will focus all our capital, energy and resources on accelerating growth and driving margin expansion in our market-leading US$7.0 billion business aircraft franchise. With a stronger balance sheet after the completion of this transaction, an industry-leading portfolio of products, a strong backlog, and a rapidly growing aftermarket business, we will compete in this market from a position of strength,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc.
Bombardier has signed a Memorandum of Understanding (MOU) 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 transaction, Bombardier and la Caisse will sell their interests in Bombardier Transportation to Alstom on the basis of an enterprise value of US$8.2 billion. Total proceeds, after the deduction of debt-like items and transferred liabilities, including pension obligations, and net of BT cash, are expected to be approximately US$6.4 billion, subject to upward adjustments of up to US$440 million. After deducting la Caisse’s equity position between US$2.1 billion and US$2.3 billion, Bombardier would receive net proceeds of between US$4.2 to US$4.5 billion, including US$550 million of Alstom shares for a fixed subscription price of EUR 47.50, monetisable after a three-month lock-up post-closing, subject to closing adjustments, indemnities and the EUR to USD exchange rate. Bombardier intends to direct these proceeds towards debt paydown and will evaluate the most efficient debt reduction strategies.
