Added: 6th January 2022 by Alstom
Alstom announces the completion of the acquisition of Bombardier Transportation. Leveraging on its clear Alstom in Motion strategy and its strong operational fundamentals and financial trajectory, Alstom, integrating Bombardier Transportation, will strengthen its leadership in the growing sustainable mobility market by reaching a critical size in all geographies and integrating further solutions and assets to better serve its customers worldwide.
The enlarged Group has a combined proforma revenue of around €15.7 billion and a €71.1 billion combined backlog. It employs 75,000 people worldwide in 70 countries, has unparalleled R&D capabilities and a complete portfolio of products and solutions.
The rail market is supported by fundamental growth drivers, such as accelerated urbanisation, public investment strategies, and the worldwide push for green and digital transformation of transport systems. Despite the pandemic, recent stimulus announcements clearly confirm the development of sustainable mobility and more specifically of rail as a long-term priority. The rail manufacturing market is expected to grow at a 2.3% CAGR by 2025.
The Group will have an unparalleled commercial reach in all geographies thanks to the complementarities of the two companies. While the Alstom Group already had a well-established customer base in France, Italy, Spain, India, South East Asia, Northern Africa and Brazil, Bombardier Transportation will bring strong customer proximity in strategic markets such as the United-Kingdom, Germany, the Nordics, China, and North America. The Group will have now in particular very strong capabilities in Europe and North America, which represent approximately 75% of the OEM accessible market.
As previously announced, the headquarters of Alstom of the Americas will be based in Montréal, Québec – leading all operations in the region – as well as establishing a centre of excellence for design and engineering that will build on Québec’s well-established strengths in innovation and sustainable mobility.
Alstom will be even closer to its clients and able to leverage its knowledge of mobility worldwide to offer the best, fit-for-purpose mobility solutions.
The Group will offer mobility operators and network providers products and solutions throughout the entire rail value chain. Integrating Bombardier Transportation, Alstom will have the most complete rail portfolio. In Rolling Stock, its portfolio will range from light rail to very high-speed trains, including new strategic products such as people mover and monorail. The Group will be able to serve its clients in the Services space with a wider maintenance facilities network and larger predictive maintenance capabilities. With a fleet of 150,000 vehicles, Alstom will have the largest installed base worldwide, a unique springboard to further expand its leadership in Services. Its Signalling product line gains significant scale, becoming No. 2 worldwide in terms of revenue, acquiring technological capabilities and commercial capacities in strategic markets, complementary to Alstom’s.
The Group will have access to further strategic industrial capacities with competitive industrial footprint across both mature markets, such as Western Europe, North America, Australia, and growing markets, including Eastern Europe, Mexico and India. Bombardier Transportation brings hubs of expertise for locomotives and bogies in Germany, monorail and people movers in Canada, suburban and regional trains in France and the United-Kingdom, traction in Sweden, along with engineering centres in best cost countries in Thailand. It brings also seven well-established joint-ventures in China. With those immediate strategic additions to Alstom’s already diversified footprint, the enlarged Group has access to deeper industrial expertise and is closer to its customers.
Alstom is already a pioneer in mobility with leading innovations such as the recent hydrogen train, autonomous train operation, energy efficient rolling stock and infrastructure. Bringing together c.17,500 engineering and R&D talents from both groups, consolidating a rich legacy of 10,000 patents and incorporating significant additional technologies from Bombardier Transportation, for example in predictive maintenance, signalling and digital operations, the Group will be able to develop solutions at a faster pace and on a larger scale to make mobility of tomorrow a reality. Alstom is accelerating towards its ambition: be the global innovative player for a sustainable and smart mobility.
Customers and passengers will benefit from the proximity of Alstom’s employees and sites, unmatched innovation capacities, a comprehensive rail product & solutions portfolio, and commitment to an efficient delivery.
The employees of Bombardier Transportation join the Alstom Group as from January 29, 2021. These new talents will enrich Alstom’s operational profile at all levels and build, with Alstom’s employees, one agile, inclusive and responsible Alstom team.
With rail being the lowest CO2 emissive motorized mode of transportation, the Group is more than ever focused on its ambition to decarbonize mobility. Alstom reaffirms its commitments to create a positive impact in the communities it operates, to provide employees with the best working environment and experience, and to be at the highest standards in terms of responsible business practices.
Alstom confirms its objective to generate €400 million cost synergies on annual run rate basis by the fourth to fifth year and to restore Bombardier Transportation’s margin to a standard level in the medium term. The transaction is expected to be double digit EPS accretive from year 2 post closing and to preserve Alstom’s strong credit profile with a Baa2 rating.